a1392: BBC: Haiti: Director of cooperatives explains decision to stop interest payments (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Robert Benodin <r.benodin@worldnet.att.net>

Haiti: Director of cooperatives explains decision to stop interest payments
BBC Monitoring Service - United Kingdom; Mar 20, 2002


[Announcer] The CADEC [expansion unknown] cooperative in Carrefour has
suspended monthly interest payments until further notice, and they have
decided to pay interest on term accounts on a quarterly basis at an annual
rate of 20 per cent. It should be pointed out that CADEC is following the
decision of the Initiative of Cooperatives [Inicoop], which has asked its
members to stop paying special interest for 90 days. Payments will then be
made on a quarterly basis at an annual rate of 20 per cent. Inicoop says
that it wants to put order in that sector. Inicoop Secretary General Zache
Michel answers the questions of Rotchild Francois Jr as follows:
[Recording, in Creole] That decision which we have adopted is practically a
decision that came out due to the fact that there are a lot of cases of
adversity that caused the cooperatives to be in difficulty. They were being
criticized by economists and so forth, and they had legal problems. The
problems came from two sources. First, the central bank stopped the
activities of the Haitian Development Bank [BHD] for audit purposes,
meanwhile many cooperatives deposited their funds in the BHD. So, the money
of many cooperatives is now blocked, which creates liquidity problems. Then,
instead of cooperatives continuing to tell their clients that they are not
able to pay interest, which might cause customers to believe that the
cooperatives will be closed, especially since there are rumours of that out
there, in this case we ask all members of Inicoop to stop paying interest
for 90 days until the problems are solved. We will try to solve the legal
problems as well as the other problems so that we might form a united and
solid front before the population.
[Francois] This means that the people will not be able to get the usual
interest for three months.
[Michel] The interest will be paid after a period of 90 days.
[Francois] What about the people who base their budget on the interest they
normally receive? What are they going to do?
[Michel] In 1929, there was a crisis in the United States, the (?crash) of
the state. What happened was, when they realized that the whole economic
system was going to burst, the banks then decided to close their doors. They
did that for six months. All the people who had money in the banks had to
suffer. But without such an action the country would have exploded. So,
instead of allowing that, they made a decision, although it was an
unacceptable decision, but it was better than just to let go. We have done
so now, we know that a lot of people will not like it. But we had no choice
in the current circumstances.
[Francois] We have also learned that some cooperatives have closed their
doors, and nobody knows where the people in charge of the cooperatives are,
for instance in Saint-Marc and Carrefour. Are you worried about that
situation?
[Michel] We know that some cooperatives have closed their doors. Some
shareholders have come to us because due to the fact that the state did not
exert any control over the cooperatives, then the shareholders appreciate
the Inicoop movement very much. They come to us and ask us to play the role
of mediator between them and the cooperatives so that they may not lose
their money. That is what Inicoop commits itself to do in the coming days.
[End of recording]
Source: Radio Metropole, Port-au-Prince, in French 1700 gmt 19 Mar 02
/BBC Monitoring/ © BBC.