Financial Cooperatives in Haiti: A Diagnostic Review of the Sector and Its Regulatory and Supervisory Framework

This World Bank diagnostic review provides a comprehensive assessment of Haiti's financial cooperative sector, which serves approximately 1 million members representing about 15% of the adult population. The sector has experienced substantial growth, with assets increasing 101% between 2011 and 2016, rising from 0.9% to 1.7% of GDP. Financial cooperatives play a crucial role in financial inclusion, particularly for lower-income segments of the population in urban and peri-urban areas.

The study examines the legal, regulatory and supervisory framework overseen by the Central Bank of Haiti (BRH), as well as the role of second-tier organizations like ANACAPH and Le Levier federation. While these organizations provide capacity building and technical assistance to over 50 cooperatives, they still depend on donor funding and need to clarify their complementary roles.

The diagnostic reveals mixed performance in financial and operational soundness. Profitability has improved since 2013, with returns on assets reaching 5% and returns on equity 21.7% by 2016. Capital-to-asset ratios appear adequate at 26% on average, well above the mandated 12.5%. However, the sector faces challenges in financial intermediation, with loan-to-asset ratios declining to 49% and loan-to-deposit ratios to 72%, indicating significant untapped potential for supporting economic growth.

The report provides recommendations for strengthening the regulatory framework, improving operational efficiency, and enhancing the role of second-tier organizations to better support sector development and financial inclusion objectives.