This document discusses two potential poverty reduction actions for Haiti: expanding the graduation program and expanding microfinance programs. The graduation program provides assets, cash, savings, training and healthcare to extremely poor families to help them transition out of poverty. Expanding it to 10,000 families over 10 years would cost around $143,092 per beneficiary but is estimated to help over 9,500 families escape extreme poverty. The microfinance program would provide loans of $10,000 HTG to 2,500 female heads of households per year over 10 years. It would cost around $4,045 per beneficiary but generate estimated benefits of $4,376-$4,759 per beneficiary, with benefit-cost

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