Haiti Social Investment Fund
The proposed Haiti Social Investment Fund intends to increase loan availability and lower the cost of credit for SMEs (including microproducers) operating in Haiti. The Fund will complement and promote the activities of local financial institutions by providing them with low interest rate loans and guarantees to enable them to make accessible subloans to SMEs.
The Fund’s estimated size is €51 million (approximately US$70 million) funded with reimbursable and non-reimbursable contributions from the Government of Spain (€50 million), and from the IIC (€1 million). Other contributors may enter the Fund in subsequent closings.
The proposed contribution from the IIC would include a loan of €812,000. The IIC also intends to serve as fund manager and loan originator, only covering its costs, drawing on its skills and expertise in working with financial institutions and SMEs in Haiti and in the region. The Fund’s life would be 12 years. The subloans to SMEs would be primarily in the US$10,000 to US$150,000 range, and the volume of operations is expected to grow from a few dozen in the first years to several hundred after five years.
The proposed Fund would help improve the financial infrastructure, environmental and labor conditions, and corporate governance in Haiti. As a complement to the Fund, the IDB intends to provide business development assistance to SMEs in Haiti. Over time this will help SMEs join the formal sector and improve their managerial and financial skills, as well as their labor, environmental and development practices.
Environmental and Labor Issues:
This is a category III project according to the IIC’s environmental and labor review procedure because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria.
The companies whose projects are financed with funding from the Fund will be subject to an environmental and labor review consistent with IIC’s requirements and with internationally recognized and national environmental and labor laws, regulations, and standards. The Fund is committed to meet the IIC’s environmental and labor procedures and guidelines, and will abide by the IIC’s list of excluded activities. To become proficient with the application of the IIC’s environmental and labor requirements, members of the Fund’s management team shall be required to attend one of the environmental training workshops organized annually by the IIC.