Circular No. 115-3

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Central Bank of Haiti
CIRCULAR No. 115-3

TO FINANCIAL INSTITUTIONS

In application of the provisions of Articles 83 and 161 of the law of May 14, 2012 on banks and other financial institutions, the decree of June 5, 2020 on microfinance institutions, and the law of June 21, 2002 on savings and credit cooperatives, banks, financial companies "credit financial institutions", approved microfinance companies, and savings and credit cooperatives are required to comply with the following provisions regarding loans granted to their clients.

1. Loan Moratorium

a. Credit financial institutions may grant a moratorium until September 30, 2023 to any enterprise debtor within the system that wishes to benefit from it and meets the eligibility conditions below.

Loans eligible for this moratorium are those classified as Current or To Be Reported as of December 31, 2022, or those with a high probability of becoming non-performing by March 31, 2023 due to the socio-political turmoil currently affecting the country.

b. Approved microfinance companies, banks with microcredit divisions, and savings and credit cooperatives (CECs) may grant their eligible clients who wish to benefit from it a moratorium until September 30, 2023.

Eligible clients are those whose loans were performing as of December 31, 2022 and who are likely to become non-performing by March 31, 2023 due to the socio-political turmoil currently affecting the country.

During the moratorium period, only interest payments on receivables are due, and the credit classification of beneficiary clients remains that recorded on December 31, 2022.

The moratorium implies a temporal shift in the client's credit status between April 3, 2023, and September 30, 2023. Upon expiration of said moratorium, the client must resume normal monthly debt service (principal and interest payments) while retaining the same credit classification as of late March 2023. In other words, the moratorium under this circular automatically extends the duration of the affected loan by up to six (6) months. A beneficiary wishing to maintain the original loan duration may negotiate a restructuring with the relevant financial institution.

2. Restructuring and Provisioning

a. By mutual agreement with its client, a credit financial institution may, in accordance with Circular No. 87 on loan classification and the establishment of provisions for doubtful debts, redefine the terms of a commercial loan that was performing as of September 30, 2022, and has become non-performing as of March 31, 2023, or has a high probability of doing so due to the socio-political turmoil currently affecting the country. For a loan thus restructured, the financial institution is authorized, for a period of one (1) year, to apply a minimum provisioning rate of 5%. The credit financial institutions covered by this circular have until June 30, 2023, to carry out such restructurings.

If an enterprise that benefited from the aforementioned moratorium records arrears on interest payments for three (3) consecutive months during the moratorium period, its loan will be automatically classified as non-performing and the moratorium will become void. The financial institution may then, by mutual agreement with the concerned enterprise, restructure said loan. For a loan thus restructured, the financial institution is authorized, for a period of one (1) year, to apply a minimum provisioning rate of 20%. The credit financial institutions covered by this circular have until September 30, 2023, to carry out such restructurings.

Loans restructured by credit financial institutions under this circular will be reported to the BRH in accordance with the provisions of Circular 87 -or its amended version if applicable- with the notation "restructured loan Circ.115-3" or "restructured loan Circ.115-3/after moratorium", as applicable.

b. Microfinance companies, bank microcredit divisions, and savings and credit cooperatives (CECs) may, by mutual agreement with their clients, restructure loans that were performing as of December 31, 2022, and became non-performing as of March 31, 2023, or are likely to do so thereafter, due to the socio-political turmoil currently affecting the country. For loans thus restructured, these institutions are authorized to apply, for a maximum period of six (6) months, a minimum provisioning rate of 25% in the case of a CEC, or a provisioning rate corresponding to 10% of the rate normally applied to restructured loans in the case of a microfinance company or bank microcredit division. Microfinance companies, bank microcredit divisions, and savings and credit cooperatives have until June 30, 2023, to carry out such restructurings.

If the loan of an eligible client who benefited from a moratorium from a microfinance company, a bank microcredit division, or a savings and credit cooperative has experienced payment arrears for two consecutive months on interest during the moratorium period, it automatically becomes non-performing upon expiration of said moratorium. The microfinance company, bank microcredit division, or savings and credit cooperative may then choose to restructure this loan. For this loan thus restructured, the CEC is authorized to apply, for a maximum period of six (6) months, a minimum provisioning rate of 50%, and the microfinance company or bank microcredit division is authorized to apply a minimum provisioning rate corresponding to 50% of the rate normally applied to restructured loans. Microfinance companies, bank microcredit divisions, and savings and credit cooperatives have until September 30, 2023, to carry out such restructurings.

3. Other Measures

During the moratorium period, beneficiaries are exempt from late fees.

Furthermore, in order to ensure the maintenance of the capital adequacy of financial institutions in this context of socio-economic instability, the financial institutions covered by this circular are required to request a non-objection from the BRH for any project to distribute dividends or interest on permanent shares for the 2022-2023 fiscal year.

4. Reports

All financial institutions covered by this circular are required to electronically transmit to the BRH, by June 30, 2023, and September 30, 2023, a report on loans that have benefited from a moratorium, no later than 21 days after the end of each of these quarters.

In addition, microfinance companies and CECs must, with the same frequency, transmit to the BRH a report on loans that have been the subject of restructuring during the period permitted under this circular.

The format of the reports to be transmitted is attached to this circular.

5. Repeal and Entry into Force

This circular repeals Circular 115-2 of October 7, 2022, and enters into force on April 3, 2023.

Port-au-Prince, March 29, 2023

[Signature]
Jean Baden Dubois
Governor

ANNEX I
Quarterly Report on Clients Benefiting from Moratorium/Circular 115-3

Name of financial institution____________________ Period from……………to …………

Client Identification (Name of individual or enterprise)	Moratorium Date (dd/mm/yyyy)	Loan Balance at Date of Moratorium Grant (in gourdes)	Interest Payment: Current (C) or Non-Current (NC)
Client 1
Client 2
………
………

ANNEX II
Quarterly Report on Clients Benefiting from Restructuring/Circular 115-3

Name of Microfinance Company or CEC____________________ Period from……………to……………

Client Identification (Name of individual or enterprise)	Restructuring Date (dd/mm/yyyy)	Loan Balance at Date of Restructuring (in gourdes)	Type of Restructuring* (M, R)	Client Behavior After Restructuring(R, NR)
Client 1
Client 2
………
………

• M: maturity extension; R: reduction of principal or payable interest amount.
  R: Regular; NR: Irregular.