In 1995, Haiti banking sector through reformtwo important aspects of which are a cut in the reserve of the banks and a repeal of the interest rate ceiling on loans. These reforms give banks the opportunity to expand their lending, but to give who? Some banks in the informal sector, which dominates the Haitian economy, and to turn microfinance as a way to help business owners who serve in this sector. Pierre-Marie Boisson, chief economist at Sogebank, the largest bank … Read more »

In 1995, Haiti banking sector through reformtwo important aspects of which are a cut in the reserve of the banks and a repeal of the interest rate ceiling on loans. These reforms give banks the opportunity to expand their lending, but to give who? Some banks in the informal sector, which dominates the Haitian economy, and to turn microfinance as a way to help business owners who serve in this sector. Pierre-Marie Boisson, chief economist at Sogebank, the largest bank in Haiti, started selling the idea of ​​micro-financing to its Board of Directors in the late 1990s. By 2000, the new subsidiary of microfinance Sogebank, Sogesol, opened its doors for business. A year later, it has 2,200 active clients and has extended over 4,500 loans. As expected Sogesol losses, but it was a solid operating base with the help of Accion International, which is to provide a part-owner and technical assistance built. The challenge for the coming years is to further improve the productivity, the number of customers each serves its loan officers to maximize and expand beyond metropolitan Port-au-Prince to Haiti’s provincial cities. In addition to these internal challenges Sogesol has two external threats. Competition from other microfinance providers threatens not only their market share, but more menacing, threatening indebtedness of entrepreneurs in the informal sector to create. The solution to this problem is a credit bureau which to share the lender information about their borrowers. But a central bank effort in the mid-1990s to introduce such a system failed, and it is unclear who will lead a renewed effort. The other external threat is Sogesol faces an uncertain regulatory environment in which it operates. Haiti has no microfinance regulations and Sogesol is under the umbrella of the Bank Sogebank rules works. HKS case number 1657.0
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Guy Stuart
29 pages.
Release Date: 1 July 2002. Prod #: HKS077-PDF-ENG
A Commercial Bank Does Microfinance: Sogesol in Haiti HBR case solution

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