Commercialisation for Sustainability: Microfinance Institutions in Haiti

This paper examines the growing presence of microfinance institutions (MFIs) with commercial governance in the market of Port-au-Prince, Haiti. The paper:

• Aims to conclude whether this process will increase the incidence of sustainable MFIs;
• States that commercialization encompasses both the entrance of commercially oriented financial institutions, and the interest of non-governmental organizations (NGOs) to seek funds from private investors;
• Compares data from three institutions within each of the two categories to evaluate size and growth, risk, cost structure and efficiency, and profitability.

The paper is divided into the following sections:

• The background section presents the how, when and where of microfinance, as well as the background data on Haiti;
• The objective pinpoints the overriding question of the study;
• The limitations of the purpose and scope of the research are also set out;
• Evidence, presents a short summary of earlier research;
• The methodology section also describes the institutions studied under the sample, prior to detailing the analysis.

In conclusion, the paper supports commercialization of MFIs and states that commercial MFIs that receive heavy financial support are likely to be sustainable as they:

• Have larger portfolios than the financially strained NGOs;
• Operate at lower levels of risk than the NGOs;
• Possess a greater ability to avoid losses.

The paper concludes by recommending that the ideal development would be for NGOs to merge with commercial MFIs.