Financial Crime World

Haiti’s Financial Inclusion Crucial in Combating Modern Slavery Amid Crisis

As Haiti struggles to recover from a worsening crisis, exacerbated by political instability, natural disasters, and poverty, the United Nations Human Rights Office has sounded the alarm on the country’s dire situation. The precariousness of daily life for ordinary Haitians makes them highly vulnerable to modern slavery, kidnapping, sexual exploitation, and systemic violence.

The Alarming Situation

  • According to the 2022 Trafficking in Persons report published by the US, Haiti is a significant issue with human trafficking.
  • The report highlights that many poor and marginalized communities are at risk of being trafficked into forced labor and other forms of modern slavery within and outside of Haiti.

The Role of Financial Sector

  • The financial sector has a critical role to play in anti-trafficking efforts in conflict and crisis settings.
  • A recent call to action by the Inter-Agency Coordination Group Against Trafficking in Persons emphasized the importance of engaging the financial sector in identifying and addressing slavery and trafficking, as well as reducing financial exclusion, which can exacerbate exploitation.

Challenges Faced by Haiti’s Financial Sector

  • Haiti’s financial sector faces significant constraints that limit its capacity to provide financial inclusion.
  • The country was placed under “Increased Monitoring” by the Financial Action Task Force (FATF) due to deficiencies in its anti-money laundering regime, leading to concerns about de-risking and limited access to financial services.

Addressing the Issue

  • To address this issue, the UNU-ICR’s Finance Against Slavery and Trafficking (FAST) initiative conducted a rapid study with Interuniversity Institute for Research and Development (INURED) to assess the financial needs of Haiti’s most marginalized communities.
  • The report highlights the importance of financial inclusion as a protective factor against exploitation.

Key Recommendations

1. Support Collaborative Efforts

  • Support collaborative efforts between Haitian banks, microfinance initiatives, mobile network operators, and FinTech companies to offer diverse formal financial services to underserved populations.

2. Enhance Informal Financial Services

  • Explore ways to safeguard and enhance informal financial services in Haiti, such as solidarity mutuals, cooperatives, and sousous, which are critical for vulnerable communities.

3. Prioritize Vulnerable Groups

  • Prioritize those most vulnerable to modern slavery, including youth and women/girls, within financial inclusion strategies and economic empowerment activities.

4. Monitor Unintended Consequences

  • Monitor unintended consequences of the UN targeted sanction regime on financial exclusion and other vulnerabilities to modern slavery.

Conclusion

By navigating the humanitarian crisis carefully and extending financial inclusion to the poorest and most marginalized communities, Haiti can reduce its vulnerability to modern slavery and build a more resilient future.