What (Not) to Expect of Microfinance in Haiti: Testimony for the House Financial Services Subcommittee on International Monetary Policy and Trade

This paper discusses how the U.S. and international institutions can support the private sector in Haiti following the earthquake in January 2010. It also discusses the role that microfinance should play in Haiti.

International donors should provide Haitians with the cash necessary to empower them in the process of recovery and stimulate the private sector. Microfinance should be encouraged to leverage its strengths. These include an ability to build thriving dynamic institutions and give poor people an ability to control their financial destinies. Aid efforts should:

• Protect the vitality of Haiti’s MFIs, in part by not drowning them with finance;
• Give USAID and other agencies the flexibility to adapt to the Haitian economy, procuring locally when possible, eliminating bottlenecks and delivering in kind where necessary;
• Seek innovative approaches to cash delivery that exploit the money transfer and mobile phone networks;
• Generate jobs by buying locally manufactured products and services from Haiti;
• Encourage Haitians to go to the United States to work.