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Micro-Credit
To improve the economic security of rural and urban households that have been affected by the January 2010 earthquake and are currently excluded from institutionally based finance services, CEDDISEC, with support from Episcopal Relief & Development, has launched a micro-credit program.
CEDDISEC’s micro-credit program objectives are:
- To assist CEDDISEC’s past clients who, due to the January 2010 quake, have lost either their business or their business capital. These past clients will be enabled to restart or expand their businesses through access to new credit (and credit terms).
- To identify and assist new clients who seek access to credit for the launch or expansion of income-generating activities.
- By January 2012, to increase all clients’ household incomes by 15%, and improve CEDDISEC’s micro-credit program management in order to achieve a loan recovery rate greater than 80%.
CEDDISEC’s micro-credit program offers entrepreneurs loans ranging from 5,000 to 25,000 gourdes (US$120 to $625). Loans are only accessible for the creation or expansion of a business; loans may not be used for consumption purposes (e.g., household purchases, school fees, construction, etc.). Loans and loan amounts are accorded to entrepreneurs with consideration to the entrepreneur’s ability to pay it back. To make loans more accessible to entrepreneurs, CEDDISEC’s interest rate is only 2.5% digressive - half of what other finance institutions in Haiti are currently requiring. Before a loan is disbursed, each client makes a savings deposit with CEDDISEC equivalent to 20% of the approved loan amount. Upon the full repayment of their loan and any interest due, clients receive access to their savings deposit. All loan repayments, regardless of the amount, are due monthly. with the full loan amount being repaid within 6 months.
Phase III
Beginning in June 2011, CEDDISEC Micro-credit Manager Jean Estervall Dol and his team of four Loan Officers began registering clients and disbursing loans in both urban and rural communities of four communes: Port-au-Prince, Carrefour, Léogâne, and Croix des Bouquets. As of December 2011, CEDDISEC had served 82 clients with loans worth a total of US$20,738, of which 74% has already been reimbursed in full. Of these 82 clients, 73% were women, and 71% were former clients of CEDDISEC who, as of January 2010, were in good standing.
In 2012, CEDDISEC plans to support an additional 85 clients with the capital reimbursed by the 82 clients served in 2011. At the same time, CEDDISEC’s micro-credit team is exploring the expansion of services to additional clients located outside of the earthquake zone, as well as the development of alternative financial services to assist agriculturalists and emerging entrepreneurs who are unable to invest the required 20% savings deposit.
