Haitian Banking on the Mend
Pure Water for the World received an anonymous post about the effects of the earthquake on banking in Haiti.
In Haiti the capital and business center, the devastation in Port-au-Prince has crippled commerce in the whole country. Just think of living with no banks, no banking records, no electronic banking systems, no money in circulation, no shops through which money can flow, no access to local currency, dollars not accepted on the streets, no way for salaries to be paid, no way for companies to access their finances. Imagine having no money for essential goods and service for yourself and your family. In a country where the majority of the people live on less than $2.00 a day, most people had no reserves and of course, now have no money available to them.
Doing some research, we at Pure Water for the World found that some financial institutions are scheduled to reopen tomorrow (Thursday, January 21st). See the following from the Miami Herald
The Miami Herald Wednesday, 01.20.10
Flow of cash in Haiti getting up to speed
BY MARTHA BRANNIGAN AND FRANCES ROBLES
A rupture in the flow of cash to Haiti should begin to ease as the quake-ravaged country plans to reopen its banks Thursday after a nine-day shutdown. Haiti scrambled Tuesday to get its fragile banking system up and running, a pivotal step in restoring life to the earthquake-battered nation.
Haiti’s central bank told its commercial banks, which have remained closed since the Jan. 12 earthquake, to reopen Thursday. “People in diaspora should not have any problems sending money to family,” said Charles Castel, head of the central bank.
Meanwhile, money transfer services, which play a critical role in sending cash to Haitians from family members abroad, began resuming operations amid damaged facilities, limited communications, and a shortage of cash.
To help, some firms, such as Western Union and Unitransfer, are temporarily offering fee-free money transfers. As Haiti looks to stabilize, cash and a functioning banking and payments system will become increasingly crucial, banking experts say.
A World Bank official told The Miami Herald that experts inside and outside of the bank planned to hold a conference call Wednesday to evaluate the status of Haiti’s financial system and to discuss ways to inject life into the remittances and payments system.
Amiceau Almira, who used to work at Western Union, sat outside a damaged center in Petionville Tuesday, his pockets empty, telling folks that the shop was still closed. He said the agency is open in Saint-Marc, Gonaive and Cap Haitien, and expected to open more locations in the capital on Thursday or Friday.
“Currently, we’re working with our agents and local offices in Haiti to help restore service. We are operating on a partial basis,” said Daniel Diaz, a Western Union spokesman. “Where we have open locations, they are operating. The only variable factor is the availability of currency.”
Haitians rely heavily on remittances from friends and family members overseas. The Inter-American Development Bank estimates remittances to Haiti reached more than $1.87 billion in 2008. That amounted to 16.2 percent of the gross domestic product. About 70 percent of the money came from the United States, which has large groups of Haitians in Miami, New York and Boston.
“It’s going to be critical to open up the spigot,” said John Rodriguez, president of the Florida International Bankers Association.
Hollywood-based Unitransfer, a major money transfer firm in Haiti, said it resumed sending money from the United States to people in Haiti Tuesday, and isn’t charging fees.
“We are waiving all transfer fees. We know the situation is difficult on this side as well, and we want to do whatever is possible to help people to send money that is crucially needed in Haiti,” said Jean-Marc Piquion, a vice president at Unitransfer, a unit of Unibank, Haiti’s largest commercial bank.
Piquion said locations in the provinces should be operating normally, while outlets in Port-au-Prince are becoming operative “gradually.”
At a Unitransfer store in Miami’s Little Haiti Tuesday, Rose Baker sent $100 to a friend’s brother suffering from two broken legs. She said it is a relief to be able to start providing direct financial help to loved ones.
“I have to come back later to send some more money to my family. Right now, they’re stranded in Port-au-Prince with nothing to eat or drink,” Baker said.
Joubert Pascal was on his way to send $200 to his sons who are sleeping outside in a park after their home suffered extensive damage. “They need the money to buy food or whatever. They have nothing in their pockets,” he said.
In Haiti, the rupture in the cash pipeline is hitting hard.
“Yesterday I bought a case of juice for 80 [Haitian gourds, the currency]. Before, it was 65,” said Estaneala Bonheur, who was sitting in a lonely Port-au-Prince soda stand with no customers. “But nobody has money in their hands, so nobody is buying. Even cigarettes are too expensive.”
Marie Carmel Plasir, who has a spot at the tent city right in front of the crumbled National Palace in Port-au-Prince, said she has lots of relatives in Miami willing to send her money. She just hasn’t had any way to get to it.
“My family in Miami takes care of me, and they want to continue taking care of me,” Plasir said. “They are asking me how to send money but there’s no possibility. Nothing is open. I have to depend on other families to share their food with us.”
To get cash into Haitians’ hands, City National Bank, an African-American-owned bank in Newark, N.J., which isn’t related to City National Bank of Florida, is working with Fonkoze, a financial services firm that serves Haiti’s poor, to provide free money transfer services to Haitians. The two firms have an ongoing project aimed at reducing the cost of delivering cash to Haitians from family and friends outside the country.
Louis Prezeau, president of City National Bank and a director of Fonkoze, said the reopening of Haiti’s banks this week should enable City National and Fonkoze to go ahead with the fee-free money transfers, once cash is available. “Fonkoze has very grass roots connections in Haiti. The idea is to make it simpler and easier and cheaper for Haitians to send funds to their families.”
Rodriguez, the president of FIBA, said the earthquake’s devastating blow comes just as Haiti was beginning to make progress in exporting and trade finance. “Factoring arrangements were being established so exports could be financed,” he said. “We’re hoping it’s a temporary interruption and we hope to get back on track.”
Miami Herald staff writers Jacqueline Charles in Port-au-Prince and Nadege Charles in Miami contributed to this report.
