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Haiti SERVICES
Banking and Financial Services
Banking and financial services expanded by almost 10
percent
a year during the 1970s, in the wake of the growth of
assembly
manufacturing, construction, and tourism. By the 1980s,
however,
the country's financial institutions suffered from
negative
growth as a result of political instability and the
consequently
insecure investment climate. In the late 1980s, banking
and
related services accounted for 10 percent of GDP, and they
employed about 4 percent of the labor force.
Nine commercial banks--five Haitian and four foreign--
constituted the heart of the financial system. In 1989 the
five
local banks were the Haitian Popular Bank (Banque
Populaire
Haïtienne), Union Bank of Haiti (Banque de l'Union
d'Haiti),
Industrial and Commercial Bank of Haiti (Banque
Industrielle et
Commerciale d'Haiti), Commercial Bank of Haiti (Banque
Commerciale d'Haiti), and the Haitian General Banking
Society
(Société Générale Haïtienne de Banque--Sogebank). Sogebank
expanded its holdings in 1986 to encompass the two
branches of
the Royal Bank of Canada, previously the oldest and
largest
foreign-owned bank in Haiti. Of the four foreign-owned
banks, two
were based in the United States (Citibank and the Bank of
Boston), one in Canada (the Bank of Nova Scotia), and one
in
France (Banque Nationale de Paris). Haiti considered the
United
States dollar legal tender, but the government prohibited
foreign
banks from maintaining foreign-currency accounts.
Seventy-five
percent of all commercial credit went to manufacturing and
commerce; only 3 percent went to agriculture. Excessive
collateral requirements, high interest rates, and a
proclivity
toward short-term financing diminished the role of
commercial
banks in stimulating output, especially among small
producers.
Five development-finance institutions--both public and
private--helped to offset deficiencies in commercial-bank
financing. The main lenders for agriculture were the
Agricultural
Credit Bank (Bureau de Crédit Agricole--BCA) and the
National
Agricultural and Industrial Development Bank (Banque
Nationale de
Développement Agricole et Industriel--BNDAI). BCA provided
shortterm credit to nearly 20,000 small-scale farmers for the
purchase
of inputs and tools. Established in 1951, BNDAI lent to
all
categories of farmers, but it provided mostly short-term
financing to larger, more capital-intensive producers,
particularly those cultivating irrigated rice. BNDAI also
lent to
industrial enterprises, generally on a long-term basis.
Private
and public funds helped to set up the Industrial
Development Fund
(Fonds de Développement Industriel--FDI) and the Haitian
Financial Development Society (Société Financière
Haïtienne de
Développement--Sofihdes) in the 1980s. FDI, founded in
1981 to
aid firms with ownership that was at least 51-percent
Haitian,
offered no direct lending to industry, but it assisted
existing
companies or new ventures in acquiring credit, supplied
guarantees on new loans, and provided technical
assistance.
Sofihdes, established in 1983 with funds from the CBI,
AID, and
the Haitian private sector, supplied credit with extended
repayment schedules to manufacturing firms and
agribusinesses
ineligible for commercial bank loans. A fifth
development-finance
institution was the Mortgage Bank (Banque de Crédit
Immobilier--
BCI). Established in 1986 with 98 percent private capital,
the
BCI provided loans of up to US$100,000 for the housing
industry,
and it offered technical assistance and special loans for
some
low-income workers.
Other financial institutions included insurance
companies,
credit unions, finance institutions for the informal
sector, and
an extensive underground credit system. Several dozen
companies
wrote insurance policies in Haiti in the 1980s, but only a
few
were locally owned. Credit unions, established in the
1940s,
mobilized savings primarily for agricultural cooperatives.
The
Haitian Development Foundation and the Haitian Fund for
Assistance to Women were instrumental in the late 1980s in
lending to small businesses that could not obtain
commercial bank
credit. There was no Haitian stock exchange.
Data as of December 1989
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