Circular 115-4

Central Bank of Haiti
CIRCULAR
No. 115-4

TO FINANCIAL INSTITUTIONS

Pursuant to 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, development finance companies, leasing companies, credit card companies (hereinafter referred to as "credit financial institutions"), licensed 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 March 31, 2024 to any debtor company that wishes to benefit from it and meets the eligibility conditions below.

Eligible loans for this moratorium are those classified as Current or To Be Monitored as of June 30, 2023, which became non-performing as of September 30, 2023, or have a high probability of becoming so thereafter due to the socio-political turmoil currently affecting the country.

b. Licensed microfinance companies, banks with microcredit divisions, and savings and credit cooperatives (SCCs) may grant their eligible clients who wish to benefit from it a moratorium until March 31, 2024.

Eligible clients are those whose loans were performing as of June 30, 2023, and who are likely to become non-performing as of September 30, 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 the one recorded as of June 30, 2023.

The moratorium implies a temporal shift in the client's credit status between October 30, 2023, and March 31, 2024. Upon expiration of said moratorium, the client must resume normal monthly debt service (principal and interest payments) while retaining the same credit classification from end-September 2023. In other words, the moratorium under this circular automatically extends the duration of the relevant loan by up to six (6) months. A beneficiary wishing to maintain the original loan term may negotiate a restructuring with the concerned financial institution.

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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 March 31, 2023, and became non-performing as of September 30, 2023, or has a high probability of becoming so due to the socio-political turmoil currently affecting the country. For a loan restructured in this manner, the financial institution is authorized, for a period of one (1) year, to apply a minimum provisioning rate of 5%. Credit financial institutions covered by this circular have until December 31, 2023, to carry out such restructurings.

If a company that benefited from the aforementioned moratorium records interest payment arrears 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 company, restructure said loan. For a loan restructured in this manner, the financial institution is authorized, for a period of one (1) year, to apply a minimum provisioning rate of 20%. Credit financial institutions covered by this circular have until March 31, 2024, to carry out such restructurings.

Loans restructured by credit financial institutions under this circular are reported to the BRH (Central Bank of Haiti) in accordance with the provisions of Circular 87 (or its amended version, if applicable), with the notation "restructured loan Circ.115-4" or "restructured loan Circ.115-4/after moratorium", as applicable.

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

If the loan of an eligible client that benefited from a moratorium granted by 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 restructured in this manner, the SCC is authorized to apply, for a maximum period of six (6) months, a minimum provisioning rate of 50% and the microfinance company or

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division of a bank 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 March 31, 2024, 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 no-objection from the BRH for any proposed distribution of dividends or interest on permanent shares for the 2023-2024 fiscal year.

4. Reporting

All financial institutions covered by this circular are required to electronically transmit to the BRH, by December 31, 2023, and March 31, 2024, a report on loans that benefited from a moratorium, no later than 21 days after the end of each of these quarters.

In addition, microfinance companies and SCCs must, at the same frequency, transmit to the BRH a report on loans that were restructured 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 115-3 of March 29, 2023, and enters into force on October 25, 2023.

Port-au-Prince, October 25, 2023.

Ronald Gabriel
Governor

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ANNEX I
Quarterly Report on Moratorium Beneficiary Clients/Circular 115-4

Name of Financial Institution __________________________ Period from ............... to ...............

Client Identification (Name of Individual or Company)	Moratorium Date (dd/mm/yyyy)	Loan Outstanding on Moratorium Grant Date (in gourdes)	Interest Payment: Current (C) or Non-Current (NC)
Client 1
Client 2
.........
.........

ANNEX II
Quarterly Report on Restructuring Beneficiary Clients/Circular 115-4

Name of Microfinance Company or SCC __________________________ Period from ............... to ...............

Client Identification (Name of Individual or Company)	Restructuring Date (dd/mm/yyyy)	Loan Outstanding on Restructuring Date (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.