Getting credit from banks here in Haiti is difficult. The World Bank ranks Haiti 175 out of 190 countries on their ease of getting credit topic. I once over heard a business associate talking about how he had to provide collateral two times the amount of the loan he was requesting from a bank here in Haiti. There are some micro-financing institutions here but you have to meet certain requirements before they will grant you a loan. Pawn shops and loan sharks are quite common in Haiti but neither are great options because of extremely high collateral and interest rates.
Good Threads employees are able to take out loans, from Good Threads, at no interest and repay their loan when they submit finished pieces of stitching. Repayment plans are negotiated between our founder, David Palmer, and the employee requesting the loan. Generally employees pay back 5% to 10% of the loan each time they are paid. Over 50% of our employees have taken out a loan with Good Threads and we have had every loan repaid.
Most employees take out loans for small business ideas, family emergencies, and unexpected expenses. We have given multiple loans for small commodity stores that employees run out of their homes. Most stores sell rice, beans, diapers, soap, chips, soft drinks, toilet paper, water, and other daily essentials.
Denise was able to start her business with a loan from Good Threads. She sells everything from batteries to diapers and her small business is the most successful in the community. She repaid her loan in six months and frequently invests the money she earns stitching belts to grow her business.
“I am able to pay my expenses, but I also try to invest my earnings to grow my business. The belts give me more financial freedom each month.”
Providing our employees with access to credit has, over time, made them even more financially independent and has really made a big difference in some of their lives. The ability to stitch a belt, while selling items from your shop at home is like working two jobs at once. The security of knowing that if someone in your family has a medical emergency you can help cover medical costs is comforting. We have employees that have saving accounts and enough saved up that they don’t really have a need for a loan. That in itself is a great accomplishment. It is the ultimate goal we hope for all of our families.