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Haiti Update

 

MFIs and Credit Unions Play Central Role in Rebuilding Haiti

March 3, 2010 


While banks remained closed in the days following Haiti's devastating earthquake, MFIs and credit unions were on the front lines of recovery efforts, providing funds and desperately needed remittances to clients nationwide. The demand for microfinance is growing as families, communities and the country struggle to rebuild. Creating and rebuilding micro, small and medium enterprises (MSMEs) will play a critical role in jumpstarting the economy and providing a source of revenue for the people of Haiti — 75% of whom were unemployed even before the disaster.

MFIs and credit unions, which provide loans to more than 244,000 clients — compared with 63,000 who receive credit from the banking sector, have a long history of meeting the financial needs of MSMEs. Their ability to develop additional microfinance products, including agricultural and housing loans, will also be critical to meet the needs of existing and new clients, such as the many internally displaced persons now living in rural areas.

The U.S. Agency for International Development (USAID)-funded Haiti Integrated Finance for Value Chains and Enterprises (HIFIVE) program, implemented by World Council of Credit Unions (WOCCU) and managed by the Academy for Educational Development (AED), has been at the forefront working with the microfinance and credit union sector to identify the institutions' operational needs and meet the changing needs of their clientele. HIFIVE hosted the first post-disaster coordination meeting of the microfinance sector and began accepting applications for rebuilding efforts through its "HIFIVE Catalyst Fund," which provides grants to individual institutions.

Institutions receiving grants from the HIFIVE Catalyst Fund are using the resources to meet the following critical needs:

  • Rebuild and repair damaged facilities
  • Replace destroyed and damaged equipment
  • Stabilize staff, many of whom have lost homes, cars and personal property
  • Train new staff and reinforce basic best practices
  • Restart training facilities that provide key support to the microfinance network
  • Establish credit and collection policies
  • Develop emergency grant funds for clients to cover basic needs
  • Create emergency liquidity funds to smooth increased savings withdrawals and delinquency rates
  • Boost capital to offer rebuilding loans and absorb write-offs
  • Support new product development, including microenterprise, housing and agricultural loans as well as business start-up loans for internally displaced persons

HIFIVE is currently conducting a formal assessment of the sector's damages and needs. The assessment includes a geographic information system (GIS) mapping of the microfinance and credit union points of service in the impacted zones. USAID will use results from the assessment to prioritize and develop rebuilding strategies for restoring much-needed financial services to the people of Haiti.

 

Photo Gallery
KOTELAM's Magoire Ambrose branch office in Port-au-Prince suffered severe damage. Staff members have set up a special office to aid members who have lost their records and identification.

WOCCU HIFIVE Haiti Album

Number of Photos: 18


Take a closer look at the realities faced by the MFIs and credit unions in Haiti as they continue to serve their members.

Photos by Christian Kober 

 


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