When a devastating earthquake hit Haiti in 2010, it left large swaths of the country in ruin, affecting more than 3 million people. In a matter of minutes, many lost their homes, businesses and even their lives under the rubble. Our longtime portfolio partner Sogesol didn’t hesitate to act: within five days, they had begun to implement their disaster recovery plan. At the time, the company served just over 11,000 clients, and it distributed emergency grants to 2,000 of its most vulnerable clients. With Accion’s support, Sogesol was able to refinance or reschedule 75 percent of its loan portfolio and help more than 8,000 Haitians restore their homes and small businesses.
Through the earthquake, droughts, and other challenges, we have been continuously impressed with Sogesol during our nearly two decades of partnership. There’s a reason it’s at the forefront of the commercial microfinance industry in Haiti. Sogesol is the micro, small, and medium enterprise (MSME) lending arm of SOGEBANK, one of the largest commercial banks in Haiti. It was created using the service company model, which does all the work of marketing, evaluating, approving, and collecting loans, but the loans themselves are on the books of the bank. This model seeks to draw from the best elements of bank involvement while avoiding its drawbacks. The institution has grown more than tenfold since its inception, and with 18 branches located across urban and rural areas, it has become the largest MSME lender in the country.
Accion’s Global Advisory Solutions team has played a significant role in Sogesol’s development. Bringing our considerable experience in microfinance for low-income entrepreneurs from Latin America, Accion guided the initial design of Sogesol’s financial products. We then worked alongside Sogesol’s management and staff implementing and fine-tuning their products, enhancing their credit processes with the integration of scoring tools, and building their risk management function. This strategic and operational support has helped the bank to grow from 3,546 clients in 2001 to more than 36,000 last year.
Initially, Sogesol focused exclusively on the urban areas of Haiti, but as the institution has become national in scope, one-third of its current clients are from the agricultural sector and in rural areas. The institution’s agricultural loan products are in high demand because they are adapted to the farmers’ seasonal cash flows and financing needs. Agriculture is crucial to Haiti’s food security and long-term resilience, so we’re proud that we’ve been able to work with Sogesol to expand coverage in this sector.
We will continue to give advisory support to Sogesol after selling our ownership stake in the institution to the management and other current shareholders. This strategic decision will leave governance in the capable hands of those who have been involved with the institution and its parent bank for years. With this guidance, Sogesol can continue its momentum as the leading small business and agricultural lender in Haiti.
Sogesol’s resilience has helped turn street vendors into shop owners. It has rebuilt livelihoods when natural disasters have destroyed homes, agricultural lands, and small businesses. Through everything, Sogesol has demonstrated that when done right, microfinance can thrive even in the most challenging circumstances.