SHEC
In 1985, MEDA developed an
urban small business development program, one of the first of its kind
in Haiti. The program delivered loans and technical assistance to
thousands of microenterprises in the informal sector. The program
became an autonomous savings and loan cooperative called SHEC (Société Hatïenne d'Epargne et de Crédit), owned by the clients and employees.
The birth of SHEC was hastened by a military revolt. When soldiers
ousted populist President Jean-Bertrand Aristide in 1991 the last thing
on their minds was the welfare of the poor. When President Aristide was
ousted, North America reacted with an embargo that paralyzed the
country’s economy. The Canadian International Development Agency (CIDA),
a prime funder of MEDA’s credit efforts, suspended aid to Haiti. MEDA’s
credit program was shut down. Some feared the loan portfolio would
vanish. Not so. Though the MEDA office was closed and only a skeleton
staff remained, clients nonetheless showed up at the door to make loan
payments. They were asked, "Why would you want to repay when you don’t
have to?" They answered, "So the service can continue." "The people
wanted the institution to survive," says Jean-Marie Innocent, former
MEDA employee and now director of SHEC. More than two-thirds of the
clients came back on their own. The turmoil of the embargo showed how
vulnerable the credit facility was to international funding. It became
clear that an indigenous institution could circumvent such obstacles.
And if it were organized as an actual credit union it could add savings
and deposit services for the poor.
Hence, SHEC was launched as a bona fide credit union in 1994. It
purchased MEDA’s credit assets and MEDA stepped into the background as
an advisor. Within a year SHEC’s equity had tripled. Membership soared
to 4,000; savings grew to $795,000. "All this," says Innocent, "in a
place where people say there is no capital."
Typical of MEDA’s microenterprise experience, SHEC has little problem
with defaulters. Repayment rates on personal and commercial loans range
in the upper 90 percent. Part of this success is due to the fact that
people value the availability of credit and don’t want to lose it.
Another is that many loans are made to "solidarity groups" of three
people who share the money and hold each other accountable for
repayment.
SHEC is now one of the largest credit unions in Haiti. SHEC has devised
products that are highly responsive to the needs of this economic
segment. One is a specialized savings plan through which clients
contribute toward a target amount and when they reach 50 percent they
receive the remainder as a loan for special purposes such as education.
