This post was originally produced for Forbes.
The international development community learned decades ago that when relief organizations bring in donated goods that are distributed for free to people in need, one of the outcomes is often the death of local businesses that provided those goods. Why then are NGOs continuing to employ this model in Haiti, asks author, entrepreneur, investor and professor Daniel Jean-Louis.
Jean-Louis is based in Haiti. His firm, Bridge Capital provides small loans to businesses that otherwise don’t qualify for loans from Haiti’s conservative banking sector. His 100,000 jobs initiative is working across sectors with NGOs, governments and the private sector to create 100,000 jobs by 2020. He reports having helped to create more than 10,000 jobs so far, though he worries Hurricane Matthew may have destroyed some of those jobs when it destroyed so much else in Haiti.
Bridge Capital is small by almost any standard, with just $1 million in capital. In Haiti, where a $10,000 loan can have more impact, that represents the potential to help 100 companies. Jean-Louis hopes to triple the capital base in the coming year, allowing him to reach a level of profitability. Profits come from the 7 to 8 percent net interest margin on its loans.
Jude V. P. Tranquille, founder of Haiti Entrepreneurship Camp, about whom I’ve written previously, says, “Bridge Capital brings investment and the 100k jobs builds a network of businesses around the country. People are benefiting from business growth as jobs were being created, transforming lives and providing hope to families. I personally know some businesses they have funded, including Enersa Haiti, a company that provides solar energy.”
Jean-Louis is a purpose-driven entrepreneur. “My vision is to curb unemployment. I have worked all of my adult life toward that. We want to solve the problem of unemployment in Haiti. I want to help my fellow Haitian friends and family.”
Unemployment is a big problem in Haiti, he explains. “Unemployment has been a problem in Haiti as long as I can remember. A lot of people have something to do, a small micro business, but never a real job that can sustain their costs.” He notes that 70 percent of people in Haiti lack a formal job.
Jean-Louis says the government is the root of the problem. “The Government has never provided a good atmosphere where businesses can start and grow. The World Bank has published a study over and over that shows that Haiti is one of the worst places in the world to start a business. It takes thousands of dollars and months of time to register a new corporation.”
By raising capital in the United States for deployment in Haiti, Jean-Louis hopes Bridge Capital will provide fresh capital that will catalyze job formation. He makes it easier, he says, for entrepreneurs to raise money.
Jean-Louis’s book, From Aid to Trade, explains the failures of the aid apparatus in Haiti. He notes that Bill Clinton acknowledged that 50 percent of the aid promised to Haiti never left the United States. While the intention was good, he says, “it was ineffective.”
For the book, he and his co-author, Jacqueline Klamer, interviewed 1,200 people. Their goal was to determine why aid doesn’t work and to explain that in terms that the NGO community would understand. He hopes to move the NGOs to act in ways that will support economic growth.
The book is written in English and so targets the international, mostly U.S.-based donors. Jean-Louis hopes to convince donors to become more mindful of the ways their funds are used so that they don’t make matters worse by supporting NGOs whose work thwarts the local economy.
The 100,000 jobs in Haiti initiative is a first realization of the thinking in the book. By engaging NGOs as partners in job creation, he hopes to make a dent in the chronic unemployment in Haiti.
Tranquille explains, “The 100k Jobs also sponsors the well-attended ‘Buy Haitian, Restore Haiti’ event, which is a platform designed to connect businesses and the NGOs to do more transactions together, raising awareness of the importance for NGOs to buy locally.”
Jean-Louis faces twin challenges with Bridge Capital. Many small companies are not properly registered, making it difficult to set up a proper loan agreement. Getting companies registered is difficult, largely because of corruption. Bureaucrats make the process slow and tedious until they are offered sufficient gifts to move paperwork through the system.
Success is easy for Jean-Louis to define and imagine. “We will be successful if we can create 100,000 jobs by 2020. If we can reduce unemployment by 20% in the next five years. If we can curb the poverty level. When I see politicians working for the people. This is when I will be successful and the country will get better, too.” It may be harder to do.
On Thursday, January 19, 2017 at 1:00 Eastern, Jean-Louis will join me here for a live discussion about his work, his book and the effort to create more jobs in Haiti. Tune in here (at the top of this article) then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.