Photo Credit: Yunus Social Business
Improving lives in Haiti with a pioneering social business
The heart of Port-au-Prince, Haiti is a bustling hive of activity. While it appears to be full of noise, people and the sounds of street vendors plying their wares it is actually an intricate dance. Tuesday January 12th, 2010 started as an ordinary day. At 16:53 local time, a magnitude seven earthquake struck. Almost 150,000 people lost their lives. In the days that followed the world rallied to help the Haitian people rebuild a shattered country.
Jonas Guillaume was already well known in Haiti. After studying computer science in Montreal, Jonas returned to the country in 1997 and opened Haiti's first internet cafe. Following the earthquake, Jonas saw an opportunity to help solve a fundamental problem: how to provide the poorest communities access to cleaning and sanitation products at a price they could afford. He and his partner, Guy Balane, approached Yunus Social Business for support and secured financing to start Digo in 2014. Guy Balan, CEO of Digo, is an American-Haitian citizen with 10 years of experience in business development and investment banking in the USA and 5+ years of experience in the private equity sector, expanding and growing businesses in Haiti. He met and partnered with Jonas in 2013 to set the social business plan of Digo Distribution.
Tackling the challenge of sanitation in the poorest communities
In the months following the earthquake, providing access to clean water and sanitation was of greatest concern to those working to rebuild, since the absence of both were posing a major risk to health. With the outbreak of a cholera epidemic soon after, public health and sanitation became a top priority.
Primarily linked to access to clean water, improving sanitation of cooking, eating, and bathroom areas were all vital in combating the spread of the Cholera bacteria. For most Haitians sanitation products had always been an expensive, imported commodity and for the poorest communities were often simply unaffordable. With Digo, Jonas set about changing this, determined to create a business that would play an important role in increasing public health across Port-au-Prince and keeping outbreaks of disease at bay.
Before Digo, the bulk of cleaning products sold in Haiti were imported. These products were shipped to Haiti pre-diluted and pre-packaged, leading to high per-unit costs that put them out of reach of the poor. Local traders stocking imported products frequently added up to a 50% markup, further reducing their availability to those that needed them. To solve this problem, Jonas decided to take a new approach to importing and distribution, which dramatically reduced unit costs.
Instead of importing pre-diluted, pre-packaged products, Digo imports concentrated raw materials in bulk and then reformulates the finished products in their local processing plant. This integrated design leads to savings in shipping and provides bulk discounts.
Since the end products have no packaging, Digo needed a unique distribution solution to deliver products to retailers and end customers.
Digo slowly built a network of traders and micro entrepreneurs across Port-au-Prince and worked with them to establish a sales process. In exchange for an agreement for fixed profits, Digo helps retailers with advertising, painting their logo on the sides of small stores, and providing street marketing teams with music outside the stores to help sell the product.
Digo provides their cleaning products in large drums which the traders keep in their stores. Next, customers buy and collect the product in their own plastic containers. Sales representatives then visit the traders to collect the cost of the sold product, minus the fixed profit.
Removing packaging not only reduces cost, but it also tackles another of Haiti’s problems: plastic waste. This unique business model allows Digo to sell cleaning products at just 30% of the market price of imported products. Margins are kept deliberately low since profit is not the motivating factor that drives the business, and all cost savings are passed on to the end consumer.
Digo is an important contributor to the Yunus Social Business mission, to use social business as a way to achieve the UN’s Sustainable Development goals. Ensuring health and wellbeing for all through access to clean water and sanitation are two goals tied directly to Digo’s social mission and show just how far a business approach can tackle pressing human problems. Digo's example also serves as a reminder that reducing poverty is not just about income, but also about access to basic goods and services.
Digo has bold plans for the future and is already looking to expand to other areas of Haiti. A continuing partnership with Yunus Social Business, as well as an impressive track record of success means Digo has a bright future and the people of Haiti are guaranteed rising levels of health and sanitation long into the future.
This story was submitted by Yunus Social Business, an organization that grows entrepreneurs in emerging economies to solve problems of poverty in a business way.