Photo by: Pawel Gruszka
“Running a business is always like swimming upstream. In Cuba, it’s in a boat without oars in a current twice as turbulent.” -Sasha Ramos, owner of El Cocinero in Havana, Cuba.
Current Obstacles for Aspiring Entrepreneurs
Starting a business anywhere is a challenge, but starting one in Cuba comes with an almost insurmountable set of barriers.
Only 201 legal occupations for non-state entrepreneurs exist in Cuba. If a business owner wanted to stray from the list and pursue a trade outside of the ones listed, they’d risk working in a sort of legal gray area. Penalties can range from the confiscation of essential business materials to seizure of land and jail time.
Secondly, promoting one’s company is next to impossible due to the lack of reliable mass communication. Business advertising is illegal in Cuba if it promotes capitalism, leaving entrepreneurs with little to no tools to reach a wide audience.
Any internet access is heavily monitored by the Cuban government and prices for access are often upwards of $1.50 an hour. In a country where the average monthly salary is just $50 a month, browsing the web for products is a luxury few can afford.
It’s also illegal for Cubans to hold more than one license to engage in private business, so running a business where books and coffee are sold would require two separate licenses, essentially making bookshops with cafés illegal. The same applies to restaurants that have a bar. These restrictions limit the diversity business owners often have nations with free markets.
Working With Limited Resources
There’s only one wholesale market on the entire island. That means a limited range of goods and materials for business owners to draw from. Through the lens of supply and demand, supply is always remarkably insufficient.
The government requires approved business owners, also known as “cuentapropistas,” to open bank accounts to track all business spending. Cuban entrepreneurs must deposit 80 percent of their earned income into designated bank accounts, with access only granted by government officials for specifically approved business expenses.
The growth of Cuba’s private sector continues to be hampered by extensive government control and a lack of access to wholesale markets. Yet, in this climate, entrepreneurs across the island nation continue to embrace a brighter future by using principles of free enterprise.
Rising to the Challenge
The desire for free markets is abundantly clear. In less than a decade, more than 600,000 Cubans have started their own businesses. They’ve opened barber shops, bakeries, boutiques, restaurants, beauty parlors, and bars. They’ve renovated and rented spare rooms in their homes and turned family cars into taxi businesses creating an additional 400,000 jobs for fellow citizens.
Here are two rising companies in Cuba, started by individuals shunning Communist economic philosophies and embracing the self-empowerment that comes with business ownership.
Dador is a Cuban fashion and lifestyle brand based in Havana. Lauren Fajardo, co-founder of the company, studied fashion design in Cuba. When she graduated, there wasn’t a government-approved fashion industry outside of making uniforms on the island, so she became a costume designer for stage and film instead.
Fajardo launched Dador with her college friends Ilse Anton and Raquel Janero, making effective advertising moves by using social media to gain an international following.
“What people need to understand is that entrepreneurship in Cuba is very new because we have no precedent,” Fajardo said. “When we started to build our business, we realized that the business plan that we aspired to was not there, so we had to make it.”
While the current government restrictions limit their future growth is worrisome, Cubans like her are making it work - because they believe in capitalism.
“What’s keeping our heads above water is that we’re a growing community of entrepreneurs and we are willing to support and stick together to go forward and continue this path,” she said.
Cristina Figueroa, 35, of Studio Figueroa-Vives can resonate with Fajardo’s experience. Long before private businesses were allowed, her family self-financed their studio-gallery space, promoting Cuban art and culture. They’re still operating within a legal gray area, remaining independent from government controls.
“We’ve always lived in a very complex situation. It’s not like we’ve ever relaxed,” explains Figueroa. “... but that won’t stop us from creating. We will keep going, we will keep creating, because we’ve always been fighting against all odds.”
FHRC’s Microcredits Program
The Foundation for Human Rights in Cuba (FHRC) has established a Microcredits program to give Cuban citizens the freedom to experience a free enterprise system that isn't controlled by an oppressive government. Each individual can contact a local coordinator within the community to apply for an interest-free business loan, thus avoiding legal complications according to Cuban laws.
The simple application process is reviewed by a committee in the United States, as it gives Cubans the incentive to start their own business and chase their dreams - even within the strict limitations of restringing Cuban laws - without relying on government handouts.
These loans are anywhere between $100-$600 to help them establish their business by purchasing the necessary tools and supplies. While the loans are interest-free, the repaid amounts from entrepreneurs are cycled back into the program for further reinvestment to future applicants.
FHRC Impact - Changing Lives
The FHRC has helped over 70 Cubans successfully start their own businesses by funding local farms, hair salons, florists, and more. Each one of these businesses creates additional jobs in the community and allows Cubans to experience the many benefits of a free economic system.
The Microcredits program currently has a 100% repayment rate and continues to make a positive impact on the lives of everyday citizens in Cuba.
How You Can Help
The Microcredits program continues to grow in popularity with aspiring Cuban entrepreneurs. Contact us today to learn more about the Microcredits program and how you can help Cuban citizens transform their lives by starting their own business! A small donation changes lives!
Startup costs for the following economic activities are as follows:
- A small pig farm - $423
- Tailors & Seamstresses - $100-$300
- Manicurists - $200
- Florists - $300
- Hair Dressers - $300
- Chicken farms - $300
- Rabbit farms - $300
- Sheep & goat farms - $300
- Welding Shops - $300
You can also make a positive impact simply by donating as little as $5.00 each month to the Microloans program! Thanks in advance for your support!