While struggling to operate under the high administrative costs of running a microfinance institution (MFI), Sogesol has to meander the microfinance world, all while operating under Sogebank's bank regulations. There are no formal regulations governing microfinance and this leaves bank-run MFI's on shaky ground; if their umbrella organization finds the high-risk nature of giving loans without collateral, a staple of microfinance, unfeasible, their affiliates might face a shut-down. They must also deal with the very real competition from institutions that are not bank run, and, in some cases, are more established in the rural areas, where microfinance finds its biggest audience.
The service has not only been adopted by established commercial banks and other financial institutions, but it has opened the door for other groups to start their own MFI's. Over 15
years old, Fonkoze has its roots in the strata populated by the peasant farmer, the Madan Sara and all the people they serve. It is the Haitian arm of the Bangladeshi Grameen Bank, where the microfinance theory was dreamed up and put into practice.
After the 2010 earthquake, when the big commercial banks struggled to get their doors back open, the grassroots remittance network organized, through the unconventional means of flying in remittances deposited into Fonkoze accounts in the U.S. a way to get funds to the people who needed it. With such a history, the ability to take risks, and an expansive foothold into the Haitian peasant network, Fonkoze and those of its ilk pose a decided threat to commercial MFI's, while keeping the advent of microfinance on a steady track.
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