The International Finance Corporation (IFC), a member of the World Bank Group, partnered with Société Généralede Solidarité (Sogesol), a leading microfinance institution (MFI) in Haiti, to increase its support Micro, Small and Medium Enterprises (MSMEs), including agribusinesses, which represent 22 percent of the country’s GDP.
Photo: IFC
The US$2.5 million dollar commitment – the second part of a risk sharing facility – will allow Sogesol to expand its MSME portfolio across the country, fostering economic growth and job creation. The first tranche of this risk sharing facility enabled this microfinance institution to provide 354 loans, 30 percent directed at very small enterprises, 19 percent to the agricultural sector, and 33 percent to women-owned companies.
The project is part of IFC’s Small Loan Guarantee Program(SLGP), a partnership with the International Development Association’s Private Sector Window (IDA-PSW), aimed at enhancing and strengthening the capacity of financial institutions for risk-taking and financing. IFC is also providing operational and technical support to help Sogesol tailor their products to these segments.
“We are proud to see that this innovative financing structure continues to play a key role in increasing access to finance to small enterprises in Haiti, as this is typically difficult for a number of reasons including lack of collateral, poor financial track record or because these businesses are perceived as too risky,” said Judith Green, IFC Country Manager for the Caribbean.
The MSME credit gap in Haiti is estimated to reach US$2.5 billion and 49% of small firms report to underserved, while only 28 percent of farmers have bank accounts. This is a serious constraint to private sector growth in Haiti, as MSMEs employ about 80% of the total workforce and almost half of the population depends on the agricultural sector.
“Our business model seeks to help small companies overcome barriers and we tailor products to the needs of each enterprise, particularly farmers,” said Daphné Louissaint, General Manager at Sogesol. “We are also prioritizing digitalization to reach more clients in remote areas and become more efficient,” Louissaint added.
Sogesol is a leading MFI in Haiti with a strong reach in urban and rural areas. This risk-sharing facility represented IFC’s first investment in Latin America and the Caribbean under the SLGP program.
This article was originally published by IFC.
