IDB to provide up to US$2mn to secure microfinance in quake-hit country

An emergency liquidity program for microfinance institutions will be launched by IDB's multilateral investment fund ( MIF) along with a group of foundations, to guarantee the continuity of microcredit in Haiti. MIF will provide up to US$2mn to the Haitian emergency liquidity program (HELP), IDB said in a press release. The move comes months after the January 7.0-magnitude earthquake that devastated the country and killed over 200,000 people. Haitian microfinance institutions served approximately 130,000 borrowers by the end of 2009, with over US$62mn in loans outstanding. Over 30,000 of those clients were affected by the earthquake, with loans ranging from US$180 to US$1,400. HELP will also receive contributions from other partners like the Clinton Bush Haiti Fund, The Deutsche Bank Americas Foundation and others. HELP will use the resources to buy earthquake-affected loans from microfinance institutions, providing them fresh funds to maintain their lending operations and preserve their capital base, and allowing them to restructure loans, the press release said. IDB's MIF is making a US$250,000 technical cooperation grant to assist the country's microlenders in risk-management improvements, financial education to their clients and designing an insurance option to reduce microentrepeneur's vulnerability to external shocks.