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Haiti - Economy : The need for business financing, estimated at $2.5 billion 20/05/2014 13:30:01
Close to half of Haiti's micro, small and medium enterprises have credit needs that are not being met by financial institutions, amounting to an estimated loan financing gap of more than US$2.5 billion. The lack of access to finance is one of the most significant constraints to the development of Haiti's private sector. IFC, in collaboration with the Association of Professional Bankers of Haiti, is hosting a workshop for financial institutions and the government to share expertise on the legal and institutional frameworks that govern secured transactions and leasing. Collateral provides the basis for free-flowing commercial and consumer credit by reducing potential losses lenders face from non-payment. While land and buildings are widely accepted as collateral for loans, the use of movable assets, such as inventory and equipment, is restricted in Haiti due to limitations in the existing legal framework and registries. The modernization of existing legal structures would facilitate the use of movable assets to guarantee loans and unleash leasing as a new mechanism through which micro and small businesses can access term financing to build thriving companies in key sectors such as construction, transportation, services, and agriculture. In parallel, with support from the U.S. Agency for International Development, over the next two weeks, IFC and La Société Financière Haïtienne de Développement (Sofihdes) will sponsor training for up to 350 Haitian small and medium enterprises to deepen their knowledge of leasing. IFC has worked with partners in more than 58 countries to develop leasing companies and in more than 20 countries to help establish modern, web-based collateral registries to increase credit for small and medium enterprises. "A modern secured transaction system and robust leasing market will help accelerate progress toward financial inclusion in Haiti," said Ary Naïm, IFC's Representative for Haiti and the Dominican Republic. "The objective is for the Haitian financial sector to be able to offer credit to SMEs that cannot provide real estate collateral, unleashing new opportunities for thousands of small entrepreneurs." Note that IFC's portfolio in Haiti amounts to $67.9 million, including $24.4 million mobilized from other partners. We operate in sectors such as hospitality, energy, financial markets, and manufacturing. Through our advisory programs with the private sector and the government, we support access to finance, public-private partnerships, improvements to Haiti's investment climate, and programs that make small and medium enterprises more productive. Our combined investment and advisory projects in Haiti have helped create 5,000 new jobs and safeguard an addition 5,000 existing jobs. HL/ HaitiLibre
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