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Add to Preferred SourcesIFC, a member of the World Bank Group, committed a $2.5 million risk-sharing facility with Société Générale de Solidarité (Sogesol), a leading microfinance institution, to support small and medium enterprises (SMEs) and agribusiness in Haiti. With this new investment, Sogesol expects to provide more than 500 loans to SMEs and agribusinesses by 2023, fostering economic growth and job creation.
This is IFC’s first investment in the region under its Small Loan Guarantee Program (SLGP), which helps financial institutions take on greater risks and finance SMEs in difficult markets.
Smaller businesses are an engine of Haiti’s economy, accounting for over 80 percent of employment. However, traditional banking services are often only available at the top of the market. SMEs often lack collateral and formal credit record. Nearly half the country’s micro, small and medium entrepreneurs have unmet financing needs. That amounts to an estimated $2.5 billion financing gap.
Agribusiness is perceived as high risk by financial institutions due to external shocks and price volatility, as well as the lack of collateral. It is estimated that only 28% of farmers have bank accounts and 19% received an agricultural credit. This lack of access to finance is a serious constraint to private sector growth in Haiti, where 40% of the population depends on the agricultural sector, which accounts for 22% of GDP.
“We are delighted to partner with Sogesol to help small entrepreneurs and farmers boost their businesses and create jobs,” said Luc Grillet, IFC’s senior manager for Central America and the Caribbean. “This is one of several IFC initiatives aimed at expanding credit for small and medium enterprises in Haiti.”
IFC’s portfolio in Haiti amounts to $223 million, including $51 million mobilized from partner institutions. IFC operates in sectors such as agribusiness, hospitality, energy, manufacturing, and banking to provide financing for SMEs.
Original source: IFC
Published on 26 June 2019