Savings: Se Pa Fasil by Rachel Berstein

Sabotay, an informal savings mechanism, is often formed by merchants who work in the same area such as those pictures here selling cold drinks or offering moto-taxi rides in Place Boyer.

Se Pa Fasil in Haitian Creole means “it’s not easy”. For the Haitian working poor, the small quantities of cash available on a daily basis are not always sufficient to prepare a meal, much less to seed a savings account. On the other hand, savings can cushion essential consumption from the ups and downs of inconsistent revenues generated by small businesses in the informal sector. Meanwhile, major expenditures such as education costs and investment in micro-business activities hold hope for exiting poverty. Thus, the poor become skilled financial managers juggling present, short and long-term needs with the tools available to them. What are these tools in Haiti?



The most straightforward savings method is to keep cash. A study by the World Bank for the Global Findex estimates 20% of Haitians are saving in this way. The very small amounts available on a daily or weekly basis make frequent deposits in a traditional bank unfeasible while pressing needs in the household make any accumulated funds difficult to withhold. So many Haitians save at home by making a “secret box” to hide or bury, carrying the cash on their person or leaving the money with a trusted friend. However, these methods can be risky. Loss can occur from forgetting where money is hidden, theft, fire, or having the stash eaten by pests. While little data is available on the topic (beyond a very interesting study in Uganda), more vulnerable savers likely face higher risks.



Most commonly used are informal rotating savings groups often labeled tontines or RoSCAs in general but called sòl or sabotay in Haiti. In a sòl individuals contribute money monthly or weekly into a communal fund that is then disbursed to one member at a time until all members have had a turn or “hand” receiving the pot. A sabotay works in the same way but operates on a daily basis often among a group of informal merchants. Often the group organizer receives the first hand with or without paying into the fund as a fee for service and serves as a guarantor in case a member defaults. The success, risks and costs of these savings tools depend greatly on the level of trust within the group.



Informal methods are preferred to banks, especially among those with very little to save. Fees of 250-1000HTG ($5-20) can constitute a large portion of the quantity one intends to save and fees for withdrawal or inactivity can eat away at the funds. People also complain about the long waits at banks, yet the most mentioned reason not to use banks is a security concern. “When you come out, there is always someone behind you” a woman tells me, miming a thief following her exit from the bank.



Thus most Haitians make a trade off between risks and costs of the available savings methods and often combine them to reduce overall risk. Meanwhile, Fonkoze, the largest MFI in Haiti, estimates over 60% of savings account demand is unmet. The limited options for savings and barriers to their employment by the poor illustrate the demand for a reliable, accessible savings mechanism in Haiti. Our research will explore how such a product could be offered and how lottery culture could be used to introduce the working poor to formally savings and credit.