Circular 130 – On Incentives for the Tourism Sector

Bank of the Republic of Haiti

CIRCULAR # 130

TO FINANCIAL INSTITUTIONS

In accordance with Articles 83 and 161 of the Law of May 14, 2012 on banks and other financial institutions operating on the territory of the Republic of Haiti, Article 14 of the Law of June 26, 2002 on the operation of savings and credit cooperatives, and Article 36 of the Decree of June 5, 2020 on the organization and operation of microfinance institutions, the Bank of the Republic of Haiti (BRH) issues this circular aimed at providing incentives to the tourism sector.

This circular applies to Banks, Development Finance Companies, Microfinance Institutions, Savings and Credit Cooperatives, and Leasing Companies, hereinafter referred to as "financial institutions".

Preamble

Considering the difficulties of the current economic climate and their negative impacts on all sectors of the economy;

Considering the need to preserve the fruits of efforts made in recent years to equip the tourism sector with modern infrastructure;

Considering the importance of revitalizing the tourism sector for the current account balance;

Considering the necessity of taking measures to preserve the available supply of tourism products and services in Haiti;

The BRH, in its commitment to contributing to easing financing conditions for the tourism sector, is establishing credit facilitation mechanisms covering:

• Restructuring and the establishment of specific provisions on loans;
• Exemption from mandatory reserve requirements on resources;
• A preferential rate financing window.

1. Restructuring and Establishment of Specific Provisions on Loans to the Tourism Sector

The financial institutions covered by this circular are authorized to proceed, by mutual agreement with their clients, to redefine the terms (both in terms of interest rates and capital amortization) of any loan granted to a tourism sector enterprise. For the purposes of this circular, the tourism sector is considered to include all actors operating in the following sub-sectors: hospitality, accommodation, food and beverage, tourist transport, events, and tourist guiding.

Loans thus restructured by banks, development finance companies, and leasing companies will be subject to a specific provision of 10% and must be reported to the BRH separately in accordance with the provisions prescribed by Circular 87 or its replacement. In the case of microfinance institutions or savings and credit cooperatives, loans thus restructured will be subject to a specific provision of 15%.

Furthermore, if a restructuring involving an interest rate reduction requires an additional loan to the enterprise, said loan is eligible for the refinancing mechanism described in Section 3 of this circular.

2. Exemption from Mandatory Reserve Requirements on Resources

Banks are authorized not to establish mandatory reserves on both gourde-denominated and dollar-denominated resources used to grant loans to a tourism sector enterprise.

3. Refinancing Mechanism: Characteristics and Duration

A financial institution that has approved, in accordance with its policies and procedures, a credit application in gourdes to a tourism sector enterprise is eligible for BRH refinancing for said credit.

The implementation of this refinancing mechanism is based on the following:

• The BRH will grant advances in gourdes to the financial institution, with a term that may be medium or long-term.
• The advance amount may reach up to the gourde equivalent of four million US dollars (4,000,000.00 USD) per enterprise for the hospitality sub-sector, and up to the gourde equivalent of two million US dollars (2,000,000.00 USD) per enterprise for other sub-sectors.
• The annual interest rate on BRH advances will be between 0.5% and 1% and will remain fixed for the entire duration of said advance.
• In the case of banks, development finance companies, and leasing companies, the interest rate on loans granted to tourism sector enterprises must not exceed 8.5% per annum for the entire duration of the loan.
• In the case of microfinance institutions and savings and credit cooperatives, the interest rate on loans granted to tourism sector enterprises must not exceed 10% per annum for the entire duration of the loan.
• The accounts of financial institutions benefiting from refinancing, domiciled at the BRH, will be credited or debited in accordance with the loan contract established during the BRH advances.

The refinancing mechanism will be implemented over a period of ten (10) years from the date of signature of this circular. In other words, upon publication, financial institutions have a period of ten (10) years to grant loans eligible for the BRH refinancing mechanism to tourism sector enterprises. However, the maturity of granted and refinanced loans is independent of the mechanism's implementation duration; for example, a loan with a five (5) year maturity may be granted and refinanced in the tenth year of the mechanism.

4. Special Provisions

Financial institutions must comply with applicable prudential standards to be eligible for BRH refinancing under this circular.

Each advance to refinance an enterprise will be subject to a contract between the BRH and the concerned financial institution.

Refinancing a financial institution for a tourism sector enterprise does not expose the BRH to the credit risk of said enterprise. Consequently, in the event of default or difficulty by an enterprise for a credit refinanced by the BRH, the financial institution must continue to repay the advance obtained in accordance with the terms of the refinancing contract.

Following the disbursement by the BRH to a financial institution under this circular, the latter has a maximum period of three (3) business days to allocate the funds to the beneficiary enterprise.

5. Reporting

Financial institutions must submit to the BRH at the end of each quarter, namely December 31, March 31, June 30, and September 30, a detailed report on loans to the tourism sector, including beneficiaries of the BRH refinancing program, according to the formats attached to this circular. These reports must be transmitted electronically twenty-eight (28) days after the end of each quarter.

6. Sanctions

In case of non-compliance with the provisions of this circular, financial institutions are subject to the following penalties:

a) Penalties related to information reliability

The amounts declared in the required reports must match those appearing in the financial institution's accounting and auxiliary books. Any unjustified discrepancy identified by the BRH between report amounts and accounting book amounts will be penalized at a rate of 10%.

b) Penalties related to late submission of reports

Failure to submit the aforementioned reports within the required timeframe will result in late submission penalties in accordance with the provisions of Circular 110 regarding late report transmission.

7. Entry into Force

This circular repeals Circular Letter 09-1 of June 7, 2016, and enters into force on April 2, 2025.

Port-au-Prince, March 19, 2025.

Ronald Gabriel
Governor

Appendix: Reports on Loans to the Tourism Sector for the Quarter Ended ........20xx

Tourism Sector Credit Portfolio [insert the effective date of this circular]

Client Name	Sub-sector	Geographic Department	Amount Disbursed in Gourdes	Disbursement Date	Interest Rate	Loan Term	Loan Outstanding	Loan Classification (C, AS, F, D, P)
1
2
...

C=Current ; AS= To Be Monitored ; D=Doubtful ; P= Loss

List (cumulative) of Loans to the Tourism Sector under this Circular

Client Name	Sub-sector	Geographic Department	Amount Disbursed in Gourdes	Disbursement Date	Interest Rate	Loan Term	Loan Outstanding	Loan Classification (C, AS, F, D, P, F)	Facility Type (R.O, Re)
1
2
3
...

C=Current ; AS= To Be Monitored ; D=Doubtful ; P= Loss ; F= Closed R.O = Mandatory Reserve ; Re = Refinancing

Portfolio of Restructured Loans under this Circular

Client Name	Sub-sector	Geographic Department	Amount Disbursed in Gourdes	Restructuring Date	Interest Rate (%)	Maturity (in years)	Loan Outstanding in Gourdes	Loan Classification (C, AS, F, D, P)
					Before	After	Before	After
1
2
3
....