Public Service Innovators -- Pierre-Marie Boisson: Lending from the Ground Up

April 25, 2003
Miranda Daniloff Mancusi

Economist Pierre-Marie Boisson is at the forefront of a revolution in Haiti - a revolution of the financial kind. In a nation where 80 percent of the population lives in poverty, his vision has helped to create a burgeoning micro-finance industry, where lenders are willing to service small loans averaging about $400.
"Haiti has a huge and growing informal community that had been completely cut off from the banking system," says Boisson in a telephone interview from Port-au-Prince. These small loans have "a huge impact." For farmers and craftspeople selling their products in the markets, the inability to get even the smallest loan could mean the difference between staying or going out of business.
Large commercial banks previously couldn't afford to make small loans due to Haitian banking legislation. In 1990, Boisson spearheaded proposals for banking policy reforms to end legislation that strapped commercial banks by setting a ceiling on interest rates and by demanding they keep up to 70% of outstanding deposits in reserve. That meant that money was not available to be loaned out.
The proposals finally made their way through the Haitian Congress - after being shelved due to the 1991 military coup. But finally in 1995, Haiti's central bank lowered reserve requirements, making it feasible for banks lend to small entrepreneurs.
Boisson lobbied Sogebank, the nation's largest bank where he served as chief economist to open up a micro-finance arm known as Sogesol. It opened for business in August 2000 and currently has 6,500 clients. Boisson, who serves as its President, aims to have 25, 000 clients within four years.
There are still big challenges. The industry is not regulated: "The market is growing faster than regulation to protect the market," says Boisson. "We don't have a credit bureau." That, he notes, can make it difficult to recognize an over-indebted client, for example.
Boisson, who says he loves the idea of making himself useful to the community, was instilled with a sense of public service through his Jesuit schooling, where charity and being charitable were important notions. After working in both the ministries of health and finance, he came to Kennedy School as a Mason Fellow.
He has successfully lobbied Sogebank to set up a scholarship to send high-level Haitian government workers to the Kennedy School. "The main problem in Haiti is governance," Boisson says, joking that he'd like to see a Kennedy School 'mafia' in Haiti. In order for governance to improve, he says, "People need to speak the same language."
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