International Finance Corporation (IFC), a member of the World Bank Group, signed a memorandum with Banque de la République d’Haïti (Central Bank of Haiti) (BRH) to help the Haitian financial and business sectors expand leasing for micro, small, and medium enterprises (MSMEs). The project will help create jobs for low-income Haitians.

Leasing is a critical financing tool in emerging markets. It helps micro, small, and medium enterprises access the construction, transportation, and textile equipment they need to enhance productivity, business volumes, and profits.

According to a 2010 IFC-McKinsey study, only half of the leasing and credit needs of Haiti’s 900,000 micro, small, and medium enterprises are being met by financial institutions. This estimated $2.5 billion loan-financing gap is one of the most significant constraints to the development of Haitian micro, small, and medium enterprises, which employ roughly 80 percent of the country’s workers and drive private sector growth.

To address this financing gap, IFC Advisory Services, with support from the Spanish Fund for Latin America and the Caribbean and the Netherlands' Ministry of Foreign Affairs, will help draft leasing legislation and regulations, strengthen knowledge about leasing among regulators, and provide early-stage technical assistance to financial institutions interested in offering leasing products.

“This partnership with IFC will help increase the type of financial mechanisms we can provide to Haitian entrepreneurs, enabling them to grow and create jobs in Haiti,” said Charles Castel, Governor of the Banque de la République d’Haïti (Central Bank of Haiti).

As part of these efforts, IFC will organize a series of leasing workshops, in collaboration with the bank, to train government officials, financial institutions, and small and medium enterprises in technical and market-related leasing skills.

“In Haiti, small businesses urgently need increased access to financing, and leasing can provide the type of term financing required for these businesses to purchase equipment and increase their operations,” said Jean-Philippe Prosper, IFC Director for Latin America and the Caribbean. “In many parts of the developing world, leasing has unlocked the possibility for small-business owners to build thriving companies in sectors such as construction, transportation, services, and agriculture."

IFC’s strategy in Haiti combines investment and advisory services to support the sustainable development of the private sector. Over more than 35 years, IFC has supported 234 leasing projects in 60 countries. IFC will apply this global expertise to help Haiti’s economy and provide jobs that the country so desperately needs.

Photo: Charles Castel, Governor of the Bank of the Republic of Haiti (BRH) and Jean-Philippe Prosper, IFC Director for Latin America and the Caribbean, signing the agreement.

HL/ HaitiLibre