Port au Prince, Haiti, June 26, 2019 —IFC, 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.
“Smaller entrepreneurs are key for Haiti to take off and they need financial support,” said Pierre-Marie Boisson, Chairman of Sogesol. “Our partnership with IFC aims to increase the credit for entrepreneurs in Haiti, in key sectors such as agribusiness.”
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. IFC’s investment will help mitigate financial risks by partially covering credit losses on Sogesol’s SME portfolio. SLGP is a partnership with the International Development Association’s Private Sector Window, which supports private sector development, growth, and job creation in some of the world’s least-developed countries. IFC will also provide technical assistance to help strengthen Sogesol’s lending operations to SMEs.
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 are 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.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
About the IDA Private Sector Window
As part of the record $75 billion IDA18 replenishment, the World Bank Group created the $2.5 billion IDA Private Sector Window to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA18 objectives and the Sustainable Development Goals, the window provides concessional funds for co-investment alongside IFC and Multilateral Investment Guarantee Agency (MIGA) private investments. Concessional funds help to mitigate risk and reduce barriers, which unlocks and crowds in private investment in emerging markets. For more information, visit: https://ida.worldbank.org/financing/replenishments/ida18-overview/ida18-replenishment/ida18-private-sector-window
About Sogesol
Sogebank Group, Societe Generale de Solidarite SA (SOGESOL) launched its operations in November 2000. Its shareholding is 51% owned by Sogebank; other outstanding shares are owned by other investors. SOGESOL's mission is to promote Haitian entrepreneurship by adapting traditional banking services to the needs of micro and small entrepreneurs, small private sector employees and agricultural producers while also obtaining profitability and efficiency. SOGESOL offers financial products on the Haitian market to mostly low-income and informal clients. It is present in the metropolitan areas and in several provinces.
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