Government-led job creation has taken a back seat amid Tripoli’s refugee influx and paralysing political divisions.
Tripoli, Lebanon – Now may be a better time than ever to launch a business in Beirut.
Despite myriad political, environmental and social challenges in Lebanon, the picture remains rosy for entrepreneurs in the country’s capital, with major acquisitions and new funds launching seemingly every month.
Outside of Beirut, though, entrepreneurs struggle to attract the attention of banks, investors and support services. Lebanon’s second largest city, Tripoli, located about 80km north of Beirut on the Mediterranean’s eastern coast, “benefits the least from the crazy amounts of funding available now in Lebanon”, said Fadi Mikati, senior credit analyst at Kafalat, a Lebanese National Bank-sponsored company that provides guaranteed loans to small and medium-sized enterprises.
Mikati is also the founder of the Tripoli Entrepreneurs Club (TEC), an initiative to provide education and support for Tripolitans curious about starting their own ventures.
Despite sectarian divisions, a looming threat from the war in neighbouring Syria, and stigma against the city from other Lebanese, Tripoli’s proto-entrepreneurs are trying to carve out a space for themselves in the rapidly evolving Lebanese business ecosystem.
Tripoli is far poorer than Beirut, which, despite pockets of poverty, is a generally affluent city. According to the United Nations Development Programme, 57 percent of Tripoli’s population is considered poor. Only two percent of bank loans in Lebanon are awarded to Tripoli residents – whereas a whopping 83 percent of bank loans in the country are to residents of Beirut and its suburbs, according to Lebanon’s Central Administration of Statistics.
And although sectarian violence between Tripoli’s two famously restive neighbourhoods of Jabal Mohsen and Bab al-Tabbaneh has quieted down over the past two years, many Lebanese still associate the city with violence.
Ziad Sankari is a young Tripolitan whose mobile health start-up CardioDiagnostics has garnered investment from Qatar Foundation and Berytech, and even gained the attention of US President Barack Obama. But, Sankari said, he has struggled just to get potential employees living outside of Tripoli to come for interviews in the city.
“People think Tripoli is a very closed-off, conservative city, with bombs and shells raining down constantly,” said Soumaya Mehri, who founded Bread Basket, a wheat-free bakery in the northern city, in 2013.
Tripoli tour guide Mira Minkara confirms this perception: “People think, ‘Oh, it’s not safe, there are lots of Islamists and it’s full of ISIL [the Islamic State of Iraq and the Levant] … Women should cover themselves’.”
As a result of the poverty, history of violence and stigma, Mikati believes that a self-defeating mind-set has spread among the city’s youth. “Youth in the north don’t believe in themselves,” said the Tripoli native. “The only plan they have is to leave Lebanon. Through the Tripoli Entrepreneurs Club, we’re trying to show them other options.”
Despite this defeatist mentality, Mikati said, “there are more people in Tripoli interested in entrepreneurship now than ever before”. To address this hopeful trend, Mikati, his colleagues and friends, and other Tripolitan entrepreneurs are working to provide education and tools to anyone who is interested.
The TEC’s first project, shortly after its launch in 2013, was a business plan simulation programme, which attracted around 50 participants, mainly through social media. Overwhelmingly positive feedback from the first event validated the idea of the club, Mikati explained, and gave them the confidence to launch the 12-week Young Entrepreneur Program in 2014, which comprised an idea-generation phase, an intensive training retreat, and a seven-week mentorship phase to develop a business plan.
We're not expecting that even 50 percent of our students will start a business. If even one or two percent change their minds, it would be a success for us.
The winner, a social network for athletes called Derby, received sponsorship from the Tripoli Chamber of Commerce, free design help and mentorship. Since graduating from the programme last December, the Derby team has developed the product to the point where it is now testing with potential clients.
Sankari of CardioDiagnostics sees his business as a potential model for young Tripolitan entrepreneurs and start-ups. “The way to break the cycle [of poverty and despondency] is to make CardioDiagnostics a big success, so the story can become a model” for others to be inspired by, the founder said.
Sankari’s desire to see more Tripolitan entrepreneurs has taken the form of a series of workshops on technology development and software. Although the CardioDiagnostics team has only hosted two so far, eventually “this will be a formal series of events accommodating 30 to 40 engineering and computer science students”, Sankari said.
Sankari also taught two semesters of an entrepreneurship course at the Beirut Arab University’s Tripoli campus. Two of his students went on to launch businesses, he said proudly.
Given the many challenges, the fact that new businesses are still springing up in Tripoli, especially in the hospitality sector, is cause for hope. Mikati, Sankari, and others want the seeds they are sowing take root into smart, scalable businesses – but that is still a long way off.
“We’re not expecting that even 50 percent of our students will start a business,” said Mikati. “If even one or two percent change their minds, it would be a success for us.”