Accessible Finance Activity
Expanding Remote Financial
Access Using Digital Channels
January 2017 - January 2020
Creating economic prosperity for all of Haiti’s citizens remains a challenge today. Haiti is the poorest country in the Western Hemisphere, with 59 percent of the population living below the national poverty line of US $2.41 per day, according to the most recent household survey (2012), and only 13 percent of the labor force in the formal sector. Despite this, World Council of Credit Unions’ (WOCCU) experience in Haiti demonstrates that Haitians do have money to save, even if deposits are small. However, accessing financial services poses another layer of challenges. Reaching a financial institution requires paying high transport costs, as services are several hours away and concentrated in the main cities. Furthermore, financial institutions often lack liquidity and the capital needed to introduce new products and services tailored to both meet client demand and attract new clients to the sector.
WOCCU has been working on increasing financial inclusion in Haiti for over nine years. This effort has culminated in the Accessible Finance Activity, funded by the United States Agency for International Development (USAID). This program supports both USAID’s objective of promoting a stable and economically viable Haiti, and the Central Bank of Haiti’s goal of creating a financially and economically more inclusive society by ensuring the greatest possible access to savings, credit, and other financial products and services. Building on knowledge gained under USAID’s previous financial inclusion project, HIFIVE implemented by WOCCU, the Accessible Finance Activity tackles financial access challenges through two primary objectives:
Objective 1: Expand financial services and products to rural areas through established groups and digital financial services (mainly field officer banking methodology).
Objective 2: Sustainably address liquidity and capital challenges faced by microfinance institutions (MFIs) and credit unions.
Under objective 1, WOCCU is piloting its Field Officer Banking methodology—developed and tested in several Latin American countries—with CPF, SOCOLAVIM and LE LEVIER federation of credit unions in Haiti. Through field officer banking, branded as Kes Pam Pi Pre’m (KPPP) in Haiti, or ‘My Credit Union Close to Me’ in English, Rural Agents from formal financial institutions use motorbikes to reach rural areas, bringing financial services through smartphones or tablets with portable printers.
Rural Agents meet with members in person to collect deposits, process loan applications and payments, and sign up new members. Utilizing digital channels reduces transaction costs for both clients and financial institutions and increases transparency through digital receipts. With direct access to accounts through the smartphone or tablet, financial institutions can offer clients individual accounts, rather than the traditional group accounts and guarantees—enabling clients to have a direct relationship with financial institutions to start building credit history and access an array of products that meet their individual needs.
Under objective 2, WOCCU addresses liquidity and capital challenges faced by MFIs and credit unions through savings and investment mobilization. The program is working with the national association of credit unions, Association Nationale des Caisses Populaires haïtiennes (ANACAPH), an affiliate member of WOCCU, to identify and recommend client-driven deposit products, policies, and mobilization strategies. WOCCU is also partnering with SSG Advisors/Resonance to pilot its Sustainable Investment Facilitation Toolkit (SIFT) with FINCA Haiti to support capital-raising efforts.
Quarterly Update (September 2019)
As of September 2019, KPPP pilot credit unions are serving 172 groups, with 2,648 members, of which 61% are women. The start-up of the expansion phase showed a favorable increase in groups and membership, as predicted. The challenge will be in maintaining services for these remotely located members in the ongoing unpredictable context. Use of services through the groups continues to rise, as loans outstanding increased by 17.3% in this quarter and savings increased by 30.7%.
As part of the KPPP pilot expansion, CPF and SOCOLAVIM credit unions targeted new areas, including the Gonaives area, which regroups Associations Villageoise d’Épargne et de Crédit (AVEC) groups created under CARE activity. CARE’s support to the AVECs ended in 2019. Gaining access to Accessible Finance’s KPPP services provides these groups with the opportunity to build on the structure developed under CARE, while taking the next steps to joining formal financial institutions.
Furthermore, Association Nationale des Caisses Populaires Haïtiennes (ANACAPH) completed 90% of activities related to phase 2 of mobilizing savings this year, despite delays related to the unrest. Credit unions received a comprehensive training on how to prepare marketing and communications plans. Several of the 33 participating credit unions have already submitted a first draft of their new marketing and communication plans.
Finally, Accessible Finance partner, Resonance, continued to support FINCA Haiti’s executive management to prepare for an equity raise. This quarter, Resonance provided technical assistance that focused on creating guidance documents and updating financials and business models to provide a clear path for the eventual equity raise. Following the finalization of the digital Product Roadmap, which illustrates the value of FINCA Haiti’s FinTech platform and details the expenses required to build it, efforts concentrated on the creation of a Capital Raise Playbook, to be used as a reference document for the FINCA Haiti executive team to engage investors beyond the life of the activity.
Credit Unions in Haiti (2017)
- 84 total credit unions
- 912,806 members
- USD 117,894,560 in assets