NPR’s Planet Money team reports on how one very small business in Haiti has been affected by the earthquake.
Adam and Chana hung out at a tent city in Petionville. There they spied a woman with a huge tub on her head. It was filled with chicken necks, which she was selling for a few pennies apiece. Her name is Yvrose, and she runs what turned out to be a very elaborate small business.
Adam: Yvrose is a very small-time wholesaler, normally. Every two weeks she takes a bus to the Dominican Republic border and buys a bunch of produce and small products. She borrows around $500 or $1000 from a microcredit bank, which she has to pay back with 12% interest in 8 months. So, what is that– 18% annualized, or so. She brings the products back to Port-au-Prince and lends them out to various small shop owners and people who sell stuff on the street. She gives them two weeks to sell everything and then comes back to pick up the money. Her goal is to turn over that same $1000 loan 16 times in the 8 month term.
The earthquake has been a big hit to Yvrose’s business. She’d used the loan money to buy inventory, a lot of which has been destroyed. Now she has to scramble to pay the loan back. All this points to the fragility of doing business so near the poverty level:
It gives you a sense of how hard it is to break out of poverty here. For her to actually accumulate wealth she has to be really smart, really ambitious, and she has to have nothing bad ever happen in her entire working life– 30, 40, 50 years without any health shocks or burglars or anything. That’s nearly impossible.
Photo by Washington Post.