Vital foreign cash transfers worth almost $1.9B to Haitians slowed by earthquake damage

Vital cash transfers to Haiti slow to trickle

MIAMI — Cash transfers worth nearly $1.9 billion annually to Haitians from relatives living in the U.S. and elsewhere have slowed to a trickle as companies struggle for access to currency and scramble to open locations damaged by the earthquake.

Money transfer firms contacted Tuesday said their businesses are now operating on a limited basis in Haiti, mostly outside of the capital of Port-au-Prince where damage was heaviest.

“The life force for Haiti comes from the remittance industry,” said Jean-Marc Piquion, vice president for sales and marketing at Unitransfer Florida Inc. “Since a lot of people do not have access to cash, it is a necessity for the transfer services to reopen.”

Haiti’s banks have been closed since last week’s earthquake, leaving people with few options to obtain much-needed cash. And the money transfer business was key to the country, one of the world’s poorest, even before the quake struck.

In Port-Au-Prince, Marie Viana, a 36-year-old single mother of seven, said she depends on transfers of $50 a month from her half brother, a taxi driver in New York, to supplement her income from an outdoor food stand that was destroyed. Nothing is coming in now, she said.

“Now, we are all living entirely thanks to the charity of neighbors,” Viana said.

In Miami, 49-year-old Chantale Alexander Pierre was helping organize donations of clothes, food and medical supplies Tuesday at a Little Haiti church. She said many people were concerned that banks and transfer offices had collapsed in the earthquake.

“People are saying that they’re sending money, but their families aren’t getting the money because the places are crushed,” she said. “To send money right now, they’re not going to get it right now.”

More than one-third of Haitians receive cash from overseas, according to a recent survey for the Inter-American Development Bank. Three-quarters of the money — the 2008 total was $1.87 billion — is spent on basics, such as food, housing, utilities and clothing.

The average remittance in Haiti is about $150 and those who receive them typically get about 10 transfers a year, for an average total of $1,500, the IDB survey shows. A Haitian’s per-capita income in 2008 was about $1,300, according to the CIA World Factbook.

“Clearly it’s an important part of disaster relief, and it will be an important part of the redevelopment of the country moving forward,” said Gregory Watson, remittance program coordinator for an arm of the IDB.

Fernand Amandi, a pollster with Bendixen & Associates who has done extensive work in Haiti for the United Nations and IDB, said once the system rights itself cash transfers to Haiti are likely to sharply increase. For now, many companies are also temporarily waiving transfer fees.

“It’s the most direct form of aid, from family member to family member, and the need is so stark now,” Amandi said. “What you’ll see in the short term is a tremendous spike in the amount that’s sent there.”

The transfer industry took some major hits in Haiti’s earthquake.

Fonkoze, a microfinance bank that caters to Haiti’s poor, had 31 staff members lose their houses and all their belongings. Three people who worked there were killed. But as of Tuesday 28 offices were open and could pay cash transfers, according to a company statement.

Ivan Deas, sales manager at transfer firm CAM, said with Haiti’s banking system paralyzed it’s been difficult to get cash to pay the transfers. Deas said he has had currency flown to the neighboring Dominican Republic and then by plane to his 17 operating offices in Haiti.

“We’re doing our best to reopen as quickly as possible,” Deas said. “People have lost their jobs, there’s no work going on. That’s the only way to survive.”

Two of the largest transfer firms, Western Union and Moneygram International, also said offices were reopening and small amounts of cash transfers to Haiti were taking place.

“Things are starting to move now, but activity is still very low,” said Moneygram spokeswoman Lynda Michielutti.

Associated Press writers Jennifer Kay in Miami and Alfred de Montesquiou in Port-au-Prince, Haiti, contributed to this story.