Press Releases


Jannette Esguerra
Tel:  (202) 458-5204
Fax: (202) 974-4384

PORT-AU-PRINCE, HAITI, July 20, 1998 --- The International Finance Corporation is investing up to US$500,000 to create the first financial institution for microentrepreneurs in Haiti that will operate on a commercial basis. MicroCredit National (MCN), S.A., will make very small loans to Haitian entrepreneurs to develop enterprises from market stalls to car repairs to cleaning houses. The investment marks IFC’s first capital markets project in the country.
For many in the poorest country in the Western hemisphere, the only way to earn a living is to operate a very small business such as selling goods from street stalls or running taxis. These microentrepreneurs make up Haiti’s unusually large informal sector, which comprises more than half of the country’s labor force. But their only access to financing has been either family connections or banks and other organizations that charge as much as 100 percent interest rate. MicroCredit National will give those entrepreneurs a market-oriented alternative.
In its first year of operation, MCN will offer microentrepreneurs loans averaging US$260, with terms of three months to one year. MCN interest rates will be above prime, reflecting the higher risks and administrative cost of microlending, but much lower than the rates charged by other financial institutions. By the end of its third year of operation, MCN expects to have a loan portfolio of $3.6 million with 11,000 loans.
MCN will open its first branch in Port-au-Prince and plans additional offices in Cap Haitien, Jacmel, and other cities, as well as eventually expanding to cover rural areas. In five years, MCN anticipates employing 60 loan officers in six locations.
Karl Voltaire, Director of IFC’s Latin America and the Caribbean Department said that the project will make an important contribution to building Haiti’s economy by providing microentrepreneurs credit on a self-sustaining basis. And, he noted, it also empowers women entrepreneurs who are prime recipients of microcredit lending. Women use their enhanced earnings to improve the education, health, and nutrition of their families.
IFC’s equity investment will be up to 25 percent of the total project cost of US$2 million. Unibank S.A., Haiti’s second largest bank, is the project’s leading sponsor with a 40 percent stake in MicroCredit National. IPC GmbH, a German firm that is considered one of the most successful managers of microcredit institutions in the world, will take a 25 percent stake in the bank and manage the project for the first few years. IPC will also train a Haitian management team to take over the operation in a few years. Additional shareholders are expected to include International Cooperation and Development Fund of Taiwan, China, which also plans to extend a loan to MCN.
The project was developed following a pre-feasibility study funded by the IFC-managed Swedish General Consultant Trust Fund.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets and providing technical assistance and advice to governments and businesses.