Port au Prince, November 19, 2015
—IFC, a member of the World Bank Group, and the Central Bank of Haiti today signed an agreement that enables IFC to swap U.S dollars for Haitian gourdes in order to provide local currency loans to clients. IFC will use the swap to make long-term gourde-denominated investments or credits in the local private sector namely small and medium enterprises, supporting the country’s efforts to increase the use of local currency in the economy and consistent with the country’s financial inclusion strategy.
IFC is the first international financial institution to enter into a long-term swap agreement with Banque de la République d'
Haïti
to offer gourde-denominated financial services in the country. Private sector long-term lending in Haiti has often been in the form of loans in foreign currencies such as dollars. When firms borrow in the currency in which they earn revenue, they can avoid foreign exchange risk and focus on expanding and creating jobs.
“We have been working with the IFC on a wide range of initiatives to boost Haiti’s financial system. Today’s agreement is part of this excellent partnership we have forged,” said Charles Castel, Governor of the Central Bank. “Our aim is to support local entrepreneurs and grow the local economy, while maintaining the financial system’s safety and soundness.”
IFC Vice President and Treasurer Jingdong Hua reaffirmed IFC’s commitment to Haiti’s private sector during a visit to the country, where he emphasized the need to strengthen local capital markets for economic growth.
“Domestic capital markets are critical to providing long-term, local-currency finance for the private sector—which plays an essential role in job creation in emerging markets like Haiti,” said Jingdong Hua, Vice President and Treasurer. “This agreement reflects IFC’s commitment to partner with the Central Bank of Haiti to expand access to finance for local entrepreneurs through capital market innovations.”
Private sector long-term lending in developing countries has often been in the form of loans in foreign currencies such as dollars. The general lack of long-term local currency financing can impede credit for businesses in infrastructure, manufacturing, agribusiness and tourism, as well for small and medium enterprises all of which rely on local currency revenues. Firms in these sectors are exposed to considerable currency risk when they take on hard currency financing.
IFC has successfully developed a vibrant local currency lending program, first through entering into cross-currency swaps with major global banks in order to obtain local currency for on-lending, and then by expanding the range of eligible financial institutions to include strong local banks. The reliance on established swap markets has given IFC the means to provide local currency financing in more than 30 countries.
During his first visit to Haiti, Hua planned to meet with business leaders, Haiti’s Minister of Finance Wilson Laleau, and Governor Castel with whom he hosted a workshop to support the development of local capital markets in Haiti.
IFC’s Resident Representative for Haiti, Sylvain Kakou, has been based in Port au Prince since 2014 and is responsible for coordinating IFC’s program of investments and advisory services in the country. As of November 2015, IFC’s portfolio in Haiti amounted to US$114 million, including US$22 million mobilized from other partners. We operate in sectors such as hospitality, energy, financial markets, and manufacturing. Through our advisory programs with the private sector and the government, we support access to finance, public-private partnerships, improvements to Haiti’s investment climate, and programs that make small and medium enterprises more productive. IFC’s clients in Haiti last year supported more than 9,600 jobs.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org
About Banque de la République d'Haïti
The Banque de la République d’Haïti (BRH) is the Central Bank of Haiti and as such its legal and institutional attributions are price stability; the supervision and regulation of the Financial sector (excluding insurance companies); the efficiency of the payment system; being the banker to the State and its fiscal agent. Recently the BRH has been focusing on increasing credit, particularly to productive sectors as well as financial inclusion as an engine for growth. For more information, visit
www.brh.ht
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