Youth entrepreneurship

Summary

Did you know?

The credit market in Haiti has remained stagnant for the last five years, with the country’s biggest bank reporting fewer than 60,000 active loans.

Background

Located between the Caribbean Sea and the North Atlantic Ocean, Haiti occupies a third of the island of Hispaniola and is bordered to the east by the Dominican Republic. Mostly populated by descendants of African slaves, Haiti gained its independence when it freed itself from French colonial rule in 1804 and became the first country in the world led by former slaves.

Following the revolution, however, the Haitian government was forced to pay an annual indemnity of 100 million francs to France (the staggering equivalent of US$21 billion) for more than a century. The nation has been plagued by persistent economic and political instability ever since. Recent years have been no exception. On July 7, 2021, in the midst of the COVID-19 pandemic, President Jovenel Moise was assassinated, leading to widespread rioting and violent demonstrations. Just over a month later, a devastating 7.2 magnitude earthquake struck, killing at least 2,248 people and injuring more than 12,200. UNICEF has estimated that over 500,000 children were impacted by this event.

In the northern region of Haiti, many Compassion beneficiaries are living in dire conditions, with little hope for the future. About 43 per cent of churches in the north serve in rural areas where most adults are unemployed—areas like Saint-Raphael, where the unemployment rate sits at more than 90 per cent. Many homes lack access to basic services like running water, sewage and electricity. There are very few local businesses or services and job opportunities are scarce. Youth entering the workforce are forced to take low-paying jobs just to live hand-to-mouth. Sadly, many end up joining gangs as a way to make ends meet.

While local economies would benefit greatly from new businesses, which generate income and create job opportunities, entrepreneurs are hampered by restrictive policies and high start-up costs. Registering a business in Haiti is a lengthy and laborious process best described as an ‘obstacle course,’ requiring business owners to pay 179 per cent of their income per capita up front. Banks are reluctant to provide loans to businesses they deem high risk, creating a major barrier for most new start-ups. Without adequate assistance for new business start-ups, struggling communities simply can’t grow or develop—and the persistent cycle of poverty continues.

The need

In Haiti, young people are becoming more and more desperate. Poverty and unemployment continue to rise after the devastating earthquake of August 2021. Migration also continues to grow exponentially, as young adults, seeing a bleak future ahead in their home country, look for ways to leave however they can.

Compassion Haiti believes that by investing in young entrepreneurs and supporting new businesses, families can break free from poverty and entire communities can be transformed. By supporting this initiative, you can change the future of thousands of people—both now and in the generations to come. Supporting entrepreneurship initiatives can give families a source of sustainable income, creating jobs and building the local workforce.

The northern region of Haiti was selected for this initiative because of its potential to become a ‘hub’ for businesses. Recent government investment in the hospitality, manufacturing and tourism sectors could drive significant employment opportunities in the future. The northeastern community of Caracol, for example, boasts one of the largest manufacturing facilities in Haiti, which created more than 14,000 jobs in 2018 alone. Cap-Haitian, the capital city of the northern region, is the only other city in Haiti besides Port-au-Prince to have an international airport. An increase in the production and export of agricultural products like rice, cacao beans and bananas is also generating economic growth. The city of Milot is famous for its mahogany furniture, while Cap-Haitian is known for its brick production. However, despite all these promising signs, significant obstacles remain. Lack of market access, frequent floods and drought, limited access to new technologies and a lack of educational opportunities are hampering the potential for businesses to launch successfully and to grow in a sustainable way.

Our church partners believe that empowering young adults with entrepreneurship skills is key in achieving the lasting transformation of entire communities, and the nation of Haiti as a whole. That’s why in 2020, churches across the northern region provided 2,744 participants with workshops on entrepreneurship. Students began learning how to build a business plan, as well as various strategies for starting and managing a company. However, churches have been funding these workshops out of pocket, which has limited what they can offer. While more than 200 of the workshop participants submitted business plans, churches could only support 20 with further funding.

Compassion’s Youth Entrepreneurship Specialist has been working with church leaders to support the ongoing economic empowerment of beneficiaries aged 15 to 22. It has been determined that to ensure a successful outcome, participants will need more advanced entrepreneurial training to face the challenges at hand. External funding for new businesses is also needed, as churches can’t afford to continue this initiative on their own and bank loans are nearly impossible for start-ups to obtain.

A total of 53 Compassion church partners from the Limbé, Cap-Haitian, Port-Margot and Saint-Raphaël areas in the northern region want to offer beneficiaries aged 15 to 22 the chance to gain valuable entrepreneurial skills and access to seed capital, so they can successfully launch new businesses and become self-supporting as soon as possible. Following completion of their training, beneficiaries will participate in a contest. Two-hundred forty individuals will be selected to receive seed capital, with the possibility of also receiving a loan later, in a second phase of this initiative.

Intervention strategy

This is a large-scale initiative which will be carried out in three phases over the course of the next several years. Your financial gift will help us to launch phase one, which aims to provide entrepreneurship training for 5,258 participants aged 15 to 22 from 53 Compassion centres, as well as seed capital and advanced training and coaching for 240 new businesses. To minimize costs and build internal capacity, 60 program implementers, coordinators and local church staff will attend train-the-trainer sessions, where they will learn how to run the entrepreneurship sessions. This is a more cost-effective approach than hiring specialists to train the beneficiaries directly.

The workshops will be run in two rounds. Round one will cover basic information on entrepreneurship and business management, including sales strategies, customer relations, risk evaluation, marketing study and proposal writing. Round two of the workshops will cover more advanced topics focusing on business plans such as competitor analysis, revenue streams, pitching techniques and the role of technology in day-to-day business operations. Working directly with participants in the field will help them understand how to conceptualize a business idea, register a business, operate a business and make their business grow. It will also help them know how to react when facing business challenges, especially in a restrictive business environment like in Haiti.

After completing the workshops, beneficiaries will participate in a competition. Among the participants, those individuals who have not yet started their businesses will submit and pitch their business plans, using business plan templates that will be distributed to all 53 Compassion centres. Participants will be encouraged to apply in groups and to present business ideas that will increase domestic production, such as food processing, agriculture, manufacturing, restaurant and hospitality or digital services. From this contest, 240 will be selected to receive a lump sum of US$500 as seed capital. These participants will also attend further training and coaching sessions, focusing on advanced topics such as legal procedures, financial statements, human resources and innovation.

In the next phase of this intervention, participants who have already started operating a business during the last five years, along with the 240 contest winners, will then participate in a second contest, following which, 120 participants will be selected to receive a larger business loan. Phase two of this initiative will give these 120 new businesses access to a low-interest loan program run through a micro-finance institution. Part of your gift will be allocated for the upcoming loan program. Separate proposals and budgets for further phases will be submitted upon completion of the first phase.

What your gift will do

With your generous support, we can provide entrepreneurship training and seed capital for young adults from 53 frontline church partners in Haiti, including:

• Training sessions for church staff, program implementers and coordinators:
  • Meals
  • Venue rental
  • Teaching materials
  • Teaching consultant
  • Transportation and lodging (where necessary)
• Entrepreneurship workshops for 5,258 participants:
  • Meals
  • Venue rental
  • Teaching materials
  • Transportation and accommodation
• Seed capital funding:
  • Training for 240 individuals: meals, venue rental, teaching materials
  • Business competition event
  • US$500 seed capital each for 240 individuals
• Salaries for 4 program implementers and 1 coordinator
• General administration and transportation costs
• Incidental expenses

Logistics

• Local contribution: US$25,250.00
• Handling of funds: Compassion Haiti will distribute funds and ensure that this intervention remains within budget.
• Monitoring and follow-up: You can expect to receive regular reports on the progress of this initiative, including reports from some of the new businesses you will be supporting. Program implementers and a program coordinator will oversee this initiative, working in tandem with Compassion’s National Office in Haiti to ensure consistent monitoring of new and ongoing businesses and to offer support where needed