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7670: Haiti's Big Banks Find Small Business a Boon (fwd)

From: radman <resist@best.com>

Haiti's Big Banks Find Small Business a Boon


by David Gonzalez New York Times Service
Wednesday, April 18, 2001

Loans to Self-Employed Prove Successful

PORT-AU-PRINCE, Haiti Fritz Gerald Piquion may one day get that corner 
office at Sogebank, especially since his grandfather was one of the bank's 
founders. But he is intent on making it on his merits, not because of his 
For now, he has settled for the street corner as an office, making dozens 
of small loans to the vendors who pack Haiti's streets selling just about 
anything from pots and pans to shoes and food.
Mr. Piquion, 23, is among several dozen loan officers at Sogesol, a unit of 
Societe Generale Haitienne de Banque SA, or Sogebank, Haiti's leading 
commercial bank, that has expanded into microfinance as it courts the 
self-employed who make up more than 80 percent of Haiti's work force.
The fact that someone with the connections of Mr. Piquion chose to work 
with clients once shunned by banks indicates a huge shift in the lending 
culture of Haiti. The country's banks are now beginning to realize the 
untapped potential in financing small entrepreneurs.
"I truly believe that is where the money of Haiti is, with the people," 
said Mr. Piquion, who has a finance degree from Bryant College in Rhode 
Island. "It's a reality check to sit in those chairs in the clients' home 
and hear them tell you their problems and how this loan will help. I did 
not expect this at all. I came from college very young and full of ideas. 
Right now, I'm faced with reality."
Sogebank is not the first commercial bank to enter the field. It was 
preceded by three other banks that built upon the success of smaller 
lending programs pioneered by nongovernment organizations. Banks jumped in 
when Haitian regulators removed the cap on interest rates in the mid-1990s.
"Sogebank's involvement is confirmation that banks can do microlending and 
be profitable," said Robert Dressen, a consultant to the U.S. Agency for 
International Development. "The informal sector is so big and plays such a 
big part of the economy that the banks see it as something that they cannot 
While the small vendors trying to eke out a living were long overlooked, 
the fact that they have continued to set up their wares in Port-au-Prince's 
jam-packed markets was a sign of hope and opportunity amid Haiti's economic 
and political upheavals.
"So many people are unemployed in strict economic terms," said Fabrice 
Bosom, a consultant with Accion International, a nonprofit network of 
microlenders in the United States and Latin America that is advising 
Sogebank. "When you are unemployed, you live out of opportunities, and 
living out of opportunities is being an entrepreneur. These are people who 
have survived the whole system collapsing. The fact they are standing shows 
they know how to manage stuff."
The loans start at about $100 and can work their way up to $3,000 as long 
as the borrower repays on time. Loan officers visit clients not only at the 
markets but also at home to see how people live and what collateral they 
may have. Most put up appliances, inventory or even their beds for loans, 
since producing the necessary papers to prove home ownership would be 
Most borrowers use the loans to buy merchandise, slowly expanding into new 
products. For some, the result has been increased business and a better life.
"I can feed my family better and help them," said Ghiselaine Ynelus, who 
sells wooden knickknacks in Port-au-Prince.
For the bankers, the hours are long and the work is difficult, but they are 
given incentives to enlist more clients. Many of them see the job as a 
stepping stone to more traditional banking jobs.
"This work is about character and the ability to communicate," said 
Laurette Orelia, who has the most clients of any Sogesol banker.  "You 
should not be too nervous or reluctant to speak to somebody because they 
are dirty. You have to speak to anybody."
Most of the loan officers are women.
"They tend to be good communicators and tend to be more observant," said 
Valerie Kindt, a consultant with Accion. "We hire accountants. The problem 
is, they tend to look only at the number and not at the client."
Pierre-Marie Boisson, chief economist at Sogebank, who steered the creation 
of Sogesol, said that while donor-financed lending programs showed 
potential, they did not have access to enough capital and were not vigilant 
in making sure loans were repaid.
"We went into this to make a profit," he said. "When you get into this 
business with a so-called social approach, borrowers become aware of this. 
They believe you will have to understand them if they cannot pay, because 
you are a social actor, and they will more easily default than with a 
commercial institution. You have to consider them as clients the same way 
as any commercial client."
Sogesol has yet to tally the success of its lending, but executives said it 
was the fastest-growing division of the bank. They speak of ambitious plans 
to expand from their current 700 clients to 10,000 by the end of 2002 and 
into other financial services, including insurance.
By doing so, Mr. Boisson said, the bank sends a message to the business 
community. "This is a revolution," he said. "By showing the rest of the 
private sector we can do business with small people in the street, this is 
a good sign of hope for the country. We can make money and be partners with