Evaluation of Societe Financiere Haitienne de Developpement S.A. (SOFIHDES)

Special evaluation covers the period through 8/85 and is based on a review of SOFHIDES systems, procedures, and reports. SOFHIDES has successfully tailored its loan portfolio to its many and often conflicting development objectives - generating capital through loans to larger, more experienced companies in industrial areas, providing a mix of long- and medium-term loans in several industrial sectors, and providing loans to both medium- and high-risk companies. SOFHIDES' procedures for identifying projects and evaluating potential and existing loans are well conceived and are being implemented. SOFHIDES has hired a competent General Manager and established a strong Board of Directors with effective operating committees, although a shortage of local managers has made SOFHIDES rely on expatriates in this area. SOFHIDES has also recruited a small, but capable and well respected staff and is planning an offsite staff training program with the help of USAID/H funding. Nonetheless, continual recruitment of local staff to meet the needs of its growing portfolio is an important task facing SOFHIDES. Despite several tangible market constraints, sound management has enabled SOFHIDES to become financially sound in a relatively short period of time; profitability is expected during FY86. Since, however, these same constraints preclude maintenance of SOFHIDES' current high level of portfolio growth, SOFHIDES intends over the next 5 years to spread risk factors over its various project categories and limit working capital loans to project-related loans. Continued USAID financial and technical support is recommended. In regard to economic impact, over 2,000 jobs have been created through SOFHIDES' 27 projects, and its projects are expected to provide an average of $4.5 million in foreign exchange per year; the average value added has been 58%. Also, SOFHIDES' loan preparation and appraisal process has helped introduce new analytical techniques, improved management skills, and shown the advantage of long-term financing.