A Home Team Advantage, Deeper Markets, and a More Resilient Haiti
Despite a tumultuous year, Haiti INVEST’s local partners have continued to close deals that leverage private capital to drive inclusive, sustainable growth for Haitian businesses. As these transaction advisors work to deepen markets and increase small and medium enterprises’ access to capital, their efforts could prove more critical than ever to building a resilient economy in a difficult environment.
By Sarah Nolan, INVEST Activity Associate, and Lauren Yang, INVEST Communications Advisor
In May 2011, Rock Andre submitted his graduate thesis to Oklahoma State University: “Aid Relief Values in Haiti After the Earthquake: Haitians’ Preferences for Food and Other Basic Commodities.” Andre — who had received a Fulbright Scholarship to pursue a master’s degree in agricultural economics at the university — sought to analyze the impact of aid relief in his home country in the aftermath of 2010’s disastrous earthquake. What were earthquake survivors’ most critical needs? How did aid align with these priorities? Targeted relief, he reasoned, was a good way to achieve efficiency, but it required appropriate information about beneficiaries in order to achieve effectiveness.
Unfortunately, this information was in short supply. Having found limited existing research around people’s needs following natural disasters, Andre spent several months surveying his fellow Haitians approximately half a year after the earthquake. He hypothesized that most would cite home rebuilding as their highest priority, given the time and cost required.
To his surprise, he was wrong.
Of the five aid relief options Andre’s survey offered — housing, food, medical care, employment, and money — more than half of interviewees responded that they were most in need of work. When asked what they would least prefer, they again responded that “not finding a job” would be the worst outcome. In other words, Andre wrote, his findings suggested that lack of employment would leave people worse off than anything else.
In the past months, Haiti has faced numerous disruptions to everyday life and economic growth: the assassination of President Jovenel Moïse and subsequent political upheaval; another catastrophic earthquake immediately followed by a devastating tropical storm. Andre’s research suggests that supporting local businesses in their efforts to resume operations and bolster employment could be one of the most impactful ways to help Haitians recover and rebuild.
Small and medium enterprises (SMEs) contribute more than two-thirds of jobs in developing and emerging countries. In Haiti, SMEs not only play a significant role in employment, they also provide basic services to large portions of the population. Haiti INVEST, a joint effort between USAID’s Mission in Haiti and USAID INVEST, has spent the past three years building a platform that taps local finance and investment experts to facilitate private investment into Haitian SMEs. Despite a tumultuous year, these local partners have not slowed down at all — if anything, they are more resilient than ever and have continued to close deals that leverage private capital to drive inclusive, sustainable growth for local employers and their employees.
Small But Mighty SMEs
“Building local ecosystems begins at the micro-level with individuals, their respective businesses, and supporting their employees,” says Jean-Marc Cuvilly, Haiti INVEST Platform Lead. “If the Haitian economy is to expand, it will come down to the strength of the small and medium sized businesses.”
However, Haitian SMEs often struggle to access the capital they need to grow or, in unexpected circumstances, survive. With limited local financing options and significant barriers to engaging outside investors — for example, of 190 global economies, Haiti currently ranks 179 in of ease of doing business — these businesses benefit from additional support in meeting their financial needs. Following the 2010 earthquake, some estimate that 70 percent of local micro and small businesses in Haiti closed. Haiti INVEST connects SMEs with transaction advisors, finance and investment experts who help companies decide which type of financing is best for them and engage the appropriate investors and finance providers.
Haiti INVEST has engaged six partners to act as transaction advisors for Haitian SMEs in a variety of sectors: social agribusiness, autobody repair, clean energy, recycling, manufacturing, financial services, and hospitality. Nearly all these transaction advisors are in-country, giving them an invaluable understanding of the local market and its realities, as well as a vested interest in seeing local businesses succeed. Within the past year, transaction advisors have helped local businesses develop and implement strategies to raise over $19 million in capital for eleven businesses, and support employment for over 300 Haitians.
The key to this success, Cuvilly notes, is the transaction advisors’ ability to identify SMEs with the ability to withstand and grow in a difficult environment. “We’re very proud of our transaction advisors for finding these resilient businesses and being able to guide them and ultimately connect them with investors [who] appreciate what the businesses have accomplished,” says Cuvilly.
Local Investment in Local Success
One of these transaction advisors, ProFin, started their work with Haiti INVEST in late 2020 and has already made significant strides. ProFin is an established and respected investment bank within Haiti and a leader within the Haitian financial ecosystem. Within a year of working with Haiti INVEST, ProFin closed its first deal, supporting a plastic manufacturing plant which uses raw materials and recycle-based items in its production. This transaction also supported the company’s 107 employees, ensuring they maintained their jobs through the events of the past few months.
Antoine “Tony” Grand’Pierre, ProFin General Director, recalls joining the ProFin group and finding a shared passion and willingness to work on building capital markets in Haiti. Members of the ProFin team have decades of experience in the financial sector, and they treat their proximity to local businesses as an asset.
“Haiti is a small country, and the business community is pretty small, too,” says Grand’Pierre, who, in his former position at the Haitian Central Bank, constantly ran into members of his current team. “[ProFin] being a local company and with the experience [it] has, you have some kind of personal connection with these companies.”
This combination of local expertise and personal commitment presents a unique opportunity to strengthen the Haitian economy. In working with Haitian transaction advisors, Haiti INVEST soon realized that their work surfaced critical insights into macro-challenges faced by the local economy, leading to the creation of the Haiti INVEST Advisory Committee. A working group of key local stakeholders, representatives from development institutions, local banks, private investment funds, chambers of commerce, and the platform’s transaction advisors, the committee meets regularly to discuss factors that impede investment in Haiti and how to address them. For instance, Haiti INVEST transaction advisors tapped their experience seeking capital overseas to help the committee understand how to more effectively engage the Haitian diaspora.
“The transaction advisors are the ones who really have boots on the ground, who know what the environment is, the challenges of businesses and how to overcome them, how to find capital in difficult times, whether from banks or overseas institutions,” Cuvilly says. “[They] can talk about the challenges of specific deals they’re working on and how they found capital overseas, sharing what is realistic and what is not, why certain groups are more open to doing deals in Haiti — these types of conversations are always happening in the Advisory Committee.”
From Thesis to Reality
After receiving his master’s degree, Rock Andre pursued an interest in supporting SMEs, attending Oklahoma State University’s Entrepreneurship and Empowerment in South Africa program and obtaining a second master’s degree in entrepreneurship. He then returned to Haiti and formed the Center for Entrepreneurship and Leadership (CEDEL), a social enterprise that supports the growth of existing and emerging SMEs. CEDEL’s work helping businesses to formulate their strategies caught the attention of Haiti INVEST, which offered Andre a proposition: would CEDEL be interested in also working with businesses to raise money?
“[I realized that Haiti INVEST] was a good opportunity for CEDEL to work on a project that could bring value to Haitian entrepreneurs…and [they] put an emphasis on the work [they’ve] been doing on the ground in Haiti, working with entrepreneurs,” says Andre.
Since partnering with Haiti INVEST, CEDEL has successfully helped one business to raise capital and identified a pipeline of additional businesses to support in fundraising. Cuvilly has personally witnessed CEDEL’s growth, having worked with Andre since the early days of Haiti INVEST, noting how far he and CEDEL have come in developing a focused, direct approach to fundraising. CEDEL took a chance on partnering with Haiti INVEST, dedicating resources to a new type of activity; Haiti INVEST took a chance on CEDEL and its lack of fundraising track record. In Cuvilly’s eyes, the bet paid off: CEDEL joins the ranks of a network of transaction advisors who can continue to help businesses to raise capital long after Haiti INVEST has ended.
“I couldn’t agree more with Rock and his thesis. When you visit Haiti, it becomes clear that everyone imagines a future where businesses are able to thrive, hire new people, and generate employment,” Cuvilly says. “That’s what people really want. They don’t want handouts — they want local businesses to grow.”