BUH Haiti (IFC-39665)

Countries
  • Haiti
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jun 25, 2018
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
BANQUE DE L'UNION HAITIENNE S.A.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Ring Fence
  • Small & Medium Enterprises
A financial intermediary is a commercial bank or financial institution that receives funds from a development bank, sometimes for a specific lending purpose. A "ring fence" is another name for this specific purpose. These funds are then used for lending by the financial intermediary to client companies or individuals.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 10.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 5.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 10.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Jun 27, 2018

Disclosed by Bank May 24, 2018


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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the International Finance Corporation (IFC), the project hopes to address the credit gap in Haiti which the Small and Medium Enterprise (SME) Finance forum estimates amounts to almost US$2.5 billion, with 49% of Micro-, Small, and Medium Enterprises reporting that they are under or unserved by financial institutions. 

The specific objectives of this project are twofold: 

  1. Institutional capacity building and strengthening of the financial system in Haiti by supporting a promising financial intermediary through an investment and advisory program focusing on improving risk management, corporate governace, and SME lending practices
  2. Support the growth of the productive sectors of the Haitian economy by expanding and increasing access to finance to serced and underserved businesses, focusing on SMEs. 

The IFC will play several roles in the project to accomplish their stated goals:

  1. Local currency funding: the IFC will provide a 4-year senior loan in local currency to support SMEs.
  2. Mobilisation: the IFC will help the Banque de l'Union Haitienne address the need for long-term funding to support its growth strategy in SME lending by mobilising a portion of the total project size. 
  3. Technical/Industry expertise: the IFC will share its global expertise, international best practices and knowledge in SME banking and risk management with the Banque de l'Union Haitienne.

 

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The bank has rated this project FI-2 which corresponds to a B rating or medium risk.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The project will be supported by the Global Small and Medium Enterprise (SME) Finance Facility which is a partnership with the UK Department for International Development and the Government of the Netherlands.

The total project cost is up to US$10 million equivalent, with up to US$5 million for IFC’s own account and up to US$5 million from mobilized funds. At the time of writing it remained unclear where the mobilized funds would come from. 

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actor Relationship
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

There is often limited information publicly available about what development banks are funding through financial intermediaries. In 2021, the Early Warning System partnered with Oxfam International to incorporate information on high-risk projects being funded by financial intermediaries receiving funding from the International Finance Corporation (IFC) and the Dutch Development Bank (FMO).

The information listed below describes the relationship between the different private actors linked to high-risk sectors and subprojects of IFC and FMO's financial intermediary investments and/or the financial intermediary's parent companies made from 2017 through 2020, including any associated ring fences.

The database, however, does not explicitly or implicitly imply that IFC or FMO have material exposure to or are contractually or legally accountable to the sub-projects financed by their financial intermediaries or the financial intermediary's parent companies. It only shows a seemingly financial relationship among the different private actors, the financial intermediaries, and IFC or FMO.

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

Banque de l'Union Haitienne (BUH) is headquartered in Port-au-Prince, Haiti. The Bank operates with a network of 14 branches in 6 provinces across the country.

Banque de l'Union Haitienne was established in 1973 as the first private commercial bank in Haiti. The Bank has been under the oversight of the Central Bank since 2006 due to weak asset quality and performance and in 2013, a controlling stake was acquired by a consortium of investors led by the leading insurance company in Haiti, AIC. BUH’s largest shareholders are AIC (20%), Deeb Group (9%), Hinoto S.A. (7.8%) and Handal Group (7.8%).  


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Contact:

Mackensen Gomez 
Chief Executive Officer 
+509 3462 3630 
mgomez@buh.ht 
20 Rue Villate, Petion-Ville, Haiti 
www.buh.ht 

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

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