Creating Opportunity for Haitian SMEs Amid Instability: A Conversation with Local Transaction Advisory Firm GECA
Haitian transaction advisory firm GECA provides high-quality financial services specialized to the needs of their clients. In 2019, GECA began working with USAID Haiti under the INVEST initiative to help Haitian SMEs access the financing they need to grow. In this interview, CEO Johann Alexis Bounoun and CFO Béatrice Gentil share their thoughts on the challenges of working in Haiti, the experience of partnering with USAID, and different ways development agencies can assess the human impact of a transaction.
By Carolanne Chanik, INVEST Communications Coordinator
“The WiFi’s not great on our end,” says Johann Alexis Bounouni, founder and CEO of GECA, a women-owned Haitian financial services and transaction advisory firm, on a Zoom call earlier this year.
“Plus, there is a riot near our office today, so we have to work from home,” adds GECA’s Chief Financial Officer Béatrice Gentil. As technical assistance providers to Haitian SMEs, Bounouni and Gentil are no strangers to a challenging work environment. From riots to COVID-19 to political instability and subsequent loan restrictions from the banking sector, the pair has seen their fair share of hurdles, yet they continue to find ways to over them.
GECA aims to make Haiti a better, more business-friendly place for investors and small and medium-sized enterprises (SMEs). “We want to see sustainable, economic progress in Haiti and a multiplication of markets led by women,” states Gentil.
GECA provides high-quality financial services specialized to the needs of their clients. “When a client comes to GECA, we want them to feel comfortable, knowing that a team of well-prepared professionals are at their disposal for their business needs, ready to respond to the market,” explains Bounouni.
Founded just eight years ago, GECA now employs 40 professionals and provides support in accounting, audits, ISO processes, IT security, and financing and microfinancing.
In 2019, GECA began working with USAID Haiti under the INVEST initiative. Haiti INVEST uses a competitive process to select transaction advisors like GECA and engages them using performance-based incentives. Firms receive payment once they achieve pre-determined milestones that move SMEs forward on their capital raise — including a portion paid as a success fee once a deal closes.
Haiti INVEST places importance on assisting local SMEs with accessing the financing they need to grow. Although a prosperous ecosystem of SMEs is crucial for economic growth, increased employment, and the provision of goods and services locally, Haitian SMEs struggle to access financing because of the precarious local climate. Banks are hesitant to lend to growing businesses, and foreign investors are wary that the returns won’t outweigh the risks.
Through their work under Haiti INVEST, GECA has been advising Haitian SMEs across different sectors and assisting them in securing debt or equity investments. GECA began working with Haiti INVEST with the goal of raising $400,000 in capital for local SMEs. Although $400,000 in capital raises may seem modest, given Haiti’s challenging investment climate, it’s a significant amount of private capital to mobilize, and it can make a meaningful difference for local businesses.
GECA met their first target ahead of schedule, helping two local companies secure loans with Haitian banks.
GECA is now working with USAID and INVEST to support five more companies. Under this second round of support, the firm is looking to secure larger deals for a combined pipeline of more than $6 million. It recently closed its third transaction under Haiti INVEST, assisting a local energy company in raising $500,000 — the first tranche of a $1.5 million investment. By helping Haitian SMEs with their capital needs, GECA is supporting sustainable businesses in a turbulent economic environment and helping create jobs in a country where they are sorely needed.
After the Zoom call failed, I caught up with Bounouni and Gentil over email to learn more about their thoughts on the challenges of working in Haiti, the role of the private sector in international development, and what it’s been like working with USAID.
The following interview has been edited for length and clarity.
Carol Chanik: What are some of the challenges you face in your work? How have you overcome them?
Johann Alexis Bounouni: Most of the challenges we face as technical assistance providers to Haitian SMEs have been around the economic and political environments in Haiti. At first it was dealing with an increase in interest rates, then an unstable economic environment with rapid devaluation of the local currency with respect to the U.S. dollar, and now we are struggling with complications from the pandemic.
However, we’ve found that through our strict onboarding protocol developed under INVEST, we’ve been able to select and work with viable businesses who either have the measures in place to overcome these complications or are willing to work with us to develop them. We assist our clients in all aspect of their businesses, to help them become investable.
Chanik: Why do you think it’s important for development agencies to work with the private sector?
Béatrice Gentil: I believe that the private sector is at the heart of the Haitian economy. Looking across Haiti, there are many small businesses in need of financing, and they don’t always know how to get it. Through Haiti INVEST, USAID is closing the gaps between large businesses and small entrepreneurs by connecting technical advisory firms like GECA with SMEs. We’re able to take a look at the structure they’ve got in place, identify strengths and weaknesses, and then connect them to the appropriate funders.
Chanik: How can development agencies move beyond measuring leverage to assess human impact?
Bounouni: I think development agencies can create impact on a smaller scale. Of course, it’s nice to see those huge leverage figures, but like our work on INVEST, you can also make a difference by supporting SMEs that require smaller pools of capital to grow or maintain their businesses. Development agencies can work with local actors in the financial and credit union sectors to reach those smaller entrepreneurs who are often ignored or looked over in favor of big wins or easy leverage figures.
That is why INVEST was really a perfect fit for GECA. We strongly believe that helping local SMEs leads to sustainable results in the long and midterm and will help our economy grow and stabilize. In return, SMEs get structured, perspective, help, and financed. It’s a win-win.
Zooming out to INVEST’s impact — it’s a bit early at this stage to tell how it’s affecting the overall economy in Haiti. However, just looking at the clients we currently serve, we’ve already recorded jobs created in tourism and local product manufacturing, plus we’ve specialized technical labor in the area of renewable energy.
Chanik: What advice would you offer to a firm who has never worked with USAID before?
Bounouni: Get involved with USAID in any way you can to gain experience — whether that’s as a partner or as a participant in a USAID-led workshop. Contribute to their efforts to get to know them as an Agency and to learn how your firm can best support them. GECA has participated in a few USAID-led grants and contracting processes, and it’s made us more competitive as a subcontractor.
For example, participating in the contracting process with Haiti INVEST, we’ve had to turn in applications and monthly reports. We’re constantly self-evaluating during these reporting phases, so we’ve come to identify our strengths and weakness as an organization, and we’ve been able to quickly tend to the weaknesses. We pride ourselves on providing tailored support to the companies we serve in Haiti and on actively collaborating and adjusting based on feedback from our partners at USAID. Having hands on experience with USAID has helped us to do this.
Chanik: Anything else you’d like to share?
Gentil: This experience with INVEST and USAID has allowed us to streamline our services, and with recommendations from the USAID Organisational Capacity Assesement tool, we’ve made our transaction advisory process replicable. We are looking at other opportunities to partner with USAID and expand our services to other nearby Caribbean countries.
The secret to our success has been operating on a human level — not just with our clients but also our staff. Employees at GECA, no matter their position or level, receive trainings to develop and strength their skillsets. The growth of our employees as investment and financial specialists, and also ethical individuals, is valued at GECA.
One of the pillars of GECA’s business model is the transfer of knowledge and skills, both within and outside of the company, as we strive for growth and expansion. The pathway to prosperity rests on knowledge sharing and creating meaningful collaborations and partnerships between development organizations, like USAID, and local experts like GECA. Haiti’s journey to prosperity requires these equal knowledge transfers, which will ultimately facilitate sustainable economic growth.