Transformational Savings: The Haitian Sòl and the Path to a Better Life
Graduating a woman from extreme poverty means helping her establish a sustainable livelihood of her own. But establishing such a livelihood takes more than productive assets, more even than the knowledge that using her assets requires.
We say, “Give someone a fish, and they’ll eat for a day; teach them to fish, and they’ll eat for a lifetime.” But for graduation programs that serve the ultra poor, the proverbial wisdom isn’t really true. Extreme poverty is more complex. The ultra poor, who face hunger for themselves and for their children every day, need more than assets and education. They need to change the way they think.
In their book, Scarcity, Mullainathan and Shafir show how the kind of lack that characterizes extreme poverty changes the way someone thinks. The ultra poor develop a mindset that helps them survive for a day, even as it conceals the steps they could take towards flourishing in the long term.
In this paper, I discuss one strategy that we use in Haiti to help ultra poor members of our graduation program change the way they think. I introduce a particular member of our program, Guilène Joizin, who exemplifies the transformation that true graduation requires. When Guilène joined the program, she focused solely on feeding herself and her children everyday. A savings club that she entered when she began to receive a weekly cash stipend has enabled her to turn herself into a forward-looking planner, giving us good reason to expect a better life for her and her children for the long term.
Fonkoze and CLM:
Fonkoze is Haiti’s largest microfinance institution, with about 60,000 borrowers and almost 300,000 savings accounts. Since 2007, it has been serving the ultra poor – women too poor for microcredit – through its Chemen Lavi Miyò (CLM) program, an adaptation of BRAC’s CFPR-TUP.
“Chemen lavi miyò” means “the path to a better life.” CLM members receive enterprise training and the assets they need to develop new livelihoods. They also receive assistance with housing repair and latrine construction, a water filter, facilitated access to free health care from Partners in Health, and increased social capital through integration into local committees that the program helps create. Most importantly, they receive 18 months of weekly visits by case managers who help them face the range of challenges they must overcome in order to take the first steps forward out of extreme poverty.
Over 2700 families have participated in the program so far, and they have reliably increased their wealth over its course. 96% graduate with at least two sources of income and at least $200 in productive assets.
But the key to graduation is the way members transform themselves. As they enter the program, they tend to think of little but how they will find food for their children each day. By the end of the program, they are forward-looking, planning ways to invest their assets to secure a better future that they can sustain.
The Income Replacement Stipend and the Sòl:
For their first six months in the program, members receive a small cash stipend, equivalent to approximately $1 per day. The original reason for the stipend was to help them protect their new assets until they begin to earn income. The stipend enables them to start eating better right away. Without such a stipend, it was felt that members would lack the time to care for their new assets. They might succumb to the pressure to liquidate the assets quickly just to buy food. Members are also encouraged to take a small amount out of their weekly stipend and deposit it into the savings account that the CLM program opens for them.
But case managers and members began to do more with the stipend. They began to organize sòl, as well. A sòl is a kind of savings club very common in Haiti, as it is elsewhere in the world under different names. Participants in a sòl make specified, regular contributions. Daily, weekly, and monthly sòl are common. Each time they contribute, one member takes home the whole pot. It is a means of accumulating larger sums of money than regular savings usually would permit.
Sòl are run by a “manman sòl,” who is normally one of its members. The manman is responsible for making sure that members do not miss their contributions and for knowing whose turn it is to take home the pot. Case managers began taken on the role of manman sòl to give CLM members a way to participate.
Guilène Joizin is a CLM member from Pòsab, a small neighborhood just south of Mirebalais. Pòsab straddles the main highway from Port au Prince, near the major weekly market in Labasti. Guilène lives there with her with her nine-year-old son Jovensonne and her two-year-old daughter, Guinya.
She and her husband had been living on the income he earned as a porter, working for a truck driver. He would load and unload the merchandise the truck would carry from the Dominican Republic to Port au Prince. He was the sole breadwinner in their home, and he moved his wife to live in a house with him in Belladère, two hours east of Mirebalais along the Haitian-Dominican border.
One day, the truck took the longer, unpaved road through Saut d’Eau, over the mountain to Titayen. The driver wanted to avoid the customs station he’d have to pass on the direct road to Port au Prince. The truck’s brakes gave out on a long, steep descent, and Guilène’s husband was killed. He never even made it to the hospital.
Guilène was left eight months pregnant and alone with her boy. She had no income and no family nearby. She moved back to Pòsab, into a shack that her stepfather erected on her mother’s yard. She had no job skills, no productive assets, and no money to invest. She couldn’t depend on her mother, Chimène, for support. Chimène herself was barely surviving, with multiple young children on her hands.
Guilène and Jovensonne were hungry much of the time. They would average less than one meal per day. To keep her boy fed, Guilène began to sell off the housewares she had accumulated during her married life. Sheet-by-sheet, curtain-by-curtain she sold what she had. Pots, dishes, and forks and spoons disappeared as well. With each small sale, she would buy food for a day or two. Occasionally, she’d find someone who’d sell her food on credit. Then she’d have to sell something afterwards to pay her debt. She had no other source of income.
Guilène, Jovensonne, and the Sòl:
Each time a CLM member is scheduled to receive the money from her sòl, she and her case manager take some extra time to plan what she will do with the money. She might use it to pay her children’s school fees or to start a small commerce or to buy livestock or to invest in farming. The planning is important because otherwise most members will just spend the money to buy food. They’ll eat as long as it lasts, but they’ll have defeated the purpose of the sòl. Haitians say, “Lave men, siye atè.” That means, “Wash your hands and then wipe them off in the dirt.” It’s a way to speak of work that undermines itself. Someone who just spends the money from her sòl on regular daily expenses need not participate in a sòl in the first place.
When it was Guilène’s turn to collect the pot, she used the money to address her biggest problem. She added its 1500 gourds to 500 she had left from the sale of her bed and put the 2000-gourd total down as a first payment of a five-year lease on a small plot of land. The total price was 5000 gourds, but the landowner liked Guilène, and was willing to take a partial payment. She quickly built an ajoupa, a tent-like structure with a peaked roof that comes all the way to the ground. Its only walls are small triangles in the front and back. An ajoupa is generally made of sticks and straw, but Guilène was able to cover hers with the old roofing tin that she brought with her from her house in Belladère. That got her out of her mother’s yard, and made it possible for her to start to feel better about her life.
Shortly after that, we were glad when we saw that Guilène had started a small commerce. It was an important step towards ensuring daily income. When she joined CLM, she had asked us to give her goats and a pig. Each member chooses two activities she would like us to help her start. Guilène takes good care of her animals, and they should eventually earn her significant profits. But they could not help her feed her children in the short term. She needed a way to earn at least a few gourds every day, and small commerce seemed the most likely way for her to do so.
But we wondered where Guilène had gotten the money to start her commerce because we knew that the down payment she made on her lease had more-or-less cleaned her out. Guilène explained that after she paid 100 gourds into her sòl each week, she would always take 25 of the remaining 200 gourds and give them to Jovensonne. To an American accustomed to a culture in which even young children get a regular allowance, this might seem like an obvious thing to do. But of the 2700 women who have graduated from CLM thus far, and the 1000 currently in the program, Guilène is the only one we know of who has done anything like it.
Jovensonne had seen how a sòl had helped his mother, so he wanted to be part of one too. He found friends and neighbors willing to go in with him. Children would pay 25 gourds every week, just as Jovensonne did. Adults who joined might decide to pay 50 or 75 gourds so that they’d get two or three turns to take the pot. He eventually sold 16 shares, so the total pot was 400 gourds. Guilène was worried that the sòl’s members would take advantage of Jovensonne’s youth, so she became the manman sòl herself.
When it was Jovensonne’s turn to receive the pot, he gave it to his mother and told her she could start a small commerce. She got her business off to a successful start based only on the money her boy gave her. She started selling cookies, crackers, and hard candy from a basket at the side of the main road. Eventually she was able to add her own cash when her second turn at her own sòl came around. That allowed her diversify the range of products she would sell. She added peanut butter sandwiches and coffee that she roasts and grinds herself. She began to sell fried dough and sweet potatoes as well.
We were discouraged a few months later to see that Guilène’s commerce had disappeared. She had used part of the capital to buy the lumber she needed to construct a more solid house on the land she leases. Part had gone to pay school fees and buy textbooks for her boy. But a large chunk disappeared, probably ending up in the hands of a thief. Her six months of weekly stipends had passed, and now her income had returned to zero again.
But within a couple of weeks, she had a small commerce once again. When we asked her where the capital had come from, she told us that she had organized another weekly sòl, this one for 100 gourds. We knew she had no income, so we asked her where her weekly contributions were coming from.
Guilène said that she paid them from her commerce, and then explained. When organizing the sòl, she had told everyone who joined that she would have to get the first pot. Effectively, she arranged an interest-free loan from the group, and immediate started a business that would allow her to pay it back.
In less than a year, Guilène changed the way she thinks. She overcame her focus on daily survival, and started to consider how she could begin to build a better life.
Two changes in her life made this transformation possible. On one hand, the minimal weekly income that her CLM stipend guaranteed relieved the urgent scarcity that kept her focused on finding food each day. It is important to consider that nothing prevented her from starting a business before she joined CLM. If she had sold off several housewares at once, she could have raised the money to get herself started. But she had tunnel vision, and could see little but her hunger and her boy’s.
On the other hand, her sòl and the coaching from her case manager that accompanied it taught her how she could deploy her resources strategically to solve her problems over the longer term.