Serent - Microfinance

1. Graduation & Microfinance
Riphard Serent, MPA
Economist
Haiti Priorise conference, Port-au-Prince, on May 1st, 2017

2. The importance of my actions
• 60% of the population still survive on less than $2 US per day
• 24% live in extreme poverty
• The unemployment level remains oppressive
• The rate of inflation has more than doubled in under 2 years
• The exchange rate has increased by more than 25% in the same period
• Cyclone Mathew worsened living conditions for a major part of the
population (almost $ 3 billion in losses, 30% of GDP)
• Haiti’s commitment to reaching the SDGs

3. 1st targeted solution action
Expansion of the graduation programme for poverty reduction

4. Description of the recommended action
Expansion of the Graduation programme to 10,000 families over 10 years
• Provision of productive assets, support in the form of cash, savings services,
training, palliative care

5. The costs of programme expansion
• Drawn from the evaluation of the costs of a mini-expansion of the
graduation programme Chimen lavi miyò (CLM) by Fonkoze carried
out by the Grameen Foundation and revised by Sinha and Roy (2010)
• Direct costs, launch costs and ancillary costs
• Expansion of the graduation programmes presents total costs per beneficiary
of around 143,092 HTG
• With a 5% level of reduction

6. The benefits- Graduation
• With a graduation level of 97% in 2013 (Fonkoze, 2014), and almost 100%
in preceding years, it is estimated that by 2025:
• More than 9,500 families will leave the circle of extreme poverty through
this programme.
• The benefits are economic, but also and more especially social in nature
• Revenue/jobs, productive assets, housing, beds, children’s education, food safety,
sanitation
• In a neutral or realistic scenario and considering that all the benefits last for 5
years, the benefits per beneficiary are estimated between 110,029 HTG and
763,631 HTG, depending on the discount rate.

7. Total costs, total benefits and BCR-Graduation
Discount rate
3% 5% 12%
Costs 110,029 442,021 763,631
Benefits 149,597 143,092 123,768
BCR 0.89 3.09 5.10

8. 2nd targeted solution action
Expansion of a Microfinance programme for poverty reduction

9. Description of the recommended action
• A programme of microcredit for 4% of the population over 10 years
• Loan of 10,000 HTG for women heads of households
• In other words 2,500 women heads of household per year
• Over a duration of 6 months with 35% interest

10. The costs of expanding the microcredit programme
• Calculated based on data from 2006 to 2010 from USAID’s census of
the Haitian microfinance industry (2011)
• Costs of operations, financing costs and costs related to risks of default
• The expansion of the microcredit programme presents a total cost per
beneficiary of around 4,045 HTG for each 10,000 gourdes of credit allocated.

11. The benefits of the Microcredit programme
• Benefits for the microfinance institution: yield on the credit portfolio (48%)
(USAID, 2011, p.27)
• Benefits for the customer beneficiary: 2.8% for each gourde borrowed
(Chemin, 2008)
• The benefits per beneficiary are estimated at between 4,376 and 4,759 HTGs for
each 10,000 gourdes of credit contracted.
• We consider that gains in consumption are not inexistent

12. Total costs, total benefits and BCR- Microfinance
Discount rate
3% 5% 12%
Costs 4,054 4,045 4,045
Benefits 4,759 4,668 4,376
BCR 1.18 1.15 1.08