The international financial institutions (IFIs) are working
with Haiti to rebuild its financial system from scratch,
officials have told Emerging Markets.
Interbank transactions and government payments are made
manually, after the computerized system was knocked out in the
earthquake of January 12. The first step is to restore
computerized payments; the second is to take the opportunity to
push through reforms, officials believe.
The restoration and modernization of the payment
system will be central, Corinne Delechat, IMF mission
chief for Haiti, said.
The Banque de la Republique dHaïti (BRH), the
central bank, is studying technical advice and offers of aid
from multilateral and bilateral agencies, prior to deciding
what type of telecommunications and information systems to
World Bank and IDB experts are working with the central bank
to identify the best approach for restoring the real-time
payments system. The financial telecom system will have to be
replaced, Juan Buchenau, senior financial sector specialist at
the World Bank, said.
The tax administration has technical advice it requested
from the US Treasurys
Office of Technical Assistance; the World Bank is also
helping to re-establish the taxation structure and systems. At
the customs agency, the Canadian government is building on
previous work to restore operations.
Andrew Powell, the IDBs regional economist for the
Caribbean, pointed out that private-sector lending must be
renewed to enable firms to repair damaged facilities, replace
equipment, relaunch production and employ workers. We
[the IDB, IMF and World Bank] are working closely together to
understand the situation of firms, their need for credit, and
how banks can respond, he said.
The recovery of Haitis financial system will include
important reforms, including the establishment of a
credit bureau, a security registry for collateral, a land
registry and reform of insolvency legislation, Delechat
of the IMF said.
Haiti operates primarily as a cash economy. Its 9 million
population has only 40,000 cheque accounts, and 90% of
transactions are completed in cash. Cooperatives reach about 1
million clients, and microfinance institutions provide
financial services to about 250,000 people. Reconstruction must
include a broadening of the financial system, officials
A partial credit guarantee scheme is being designed at the
central banks request. President Rene Prevals government,
the central bank and private banks are defining which firms
would be eligible for the guarantees. Buchenau of the World
Bank said there is a need to design [the fund] so you
dont guarantee the loans of customers that are not
viable, and dont subsidize businesses that are viable on