Instead of red carpet, red tape greets young entrepreneurs in Kurdistan

ERBIL, Kurdistan Region – When his beard grew out after he got too busy to keep it trimmed and people kept asking how he kept it in shape and clean, 28-year-old Omer Nihad knew there was a good idea brushing his nose.

“I saw that there was an increasing demand for beard oil and there was an increasing beard trend here,” explained Nihad. “Even teenagers were asking me, ‘how can I grow a full beard?’ even though it’s impossible at their age to grow a full beard.”

So he spent months perfecting his handcrafted beard oil, trying to get the right recipe for his blend of six oils: jojoba, argon, grapeseed, castor, sweet almond, and tea tree, as well as a light pine fragrance.

Nihad saw an opportunity in the Kurdish market where there are no Kurdish branded barber products. He set out to fill that gap with a company that mixes a foreign vintage style with Kurdish traditional influences.

 When it came to naming his company, many people suggested foreign names. In the Kurdistan Region, said Nihad, there is little confidence in Kurdish-made products. If something has a foreign name, it is assumed to be better quality.

But he was determined to make a product proud to be Kurdish. “I decided to call it Rishn,” he said, from the root word rish, which means beard in Kurdish. Rishn translates as bearded. “It’s a very Kurdish name.”

Nihad got positive feedback on the name but he hit a brick wall when he tried to register it with the Chamber of Commerce.

“I had a very, very stupid problem there because they said this is not a name in the dictionary,” said Nihad. They would accept Rish but not Rishn.

That is the kind of red tape that young entrepreneurs like Nihad complain is hurting the Kurdistan Region’s efforts to climb out of a severe economic crisis that has forced many companies to close.

Rebuwar Kawani, 25, is another young Kurdish entrepreneur who has spotted a niche in Kurdistan’s business community that he thinks he can fill.

Kawani has created the website www.kurdistandirectory.com, a directory for businesses, government agencies and NGOs, providing information on the business, directions, contact details and interactive ratings and comments, all searchable in an effort to “make companies more accessible to people,” he said.

The site gives Kurdish companies an online presence and provides consumers with the information they need to find the products or services they want.

“Many Kurdish companies, they don’t have a website, small companies,” Kawani explained. “It would be expensive for them to go and set up a website, pay for the hosting, pay for the website design, have someone to regularly update it. But with this website, we do all of that for you.”

Kawani’s family moved abroad when he was a child and he grew up in the UK. But he has “always wanted to return. The family I grew up in is quite a patriotic family. This is the environment I grew up in,” he said. “And I always wished to come back and be involved in this country more so.”

Like Nihad, Kawani is passionate about building success in the Kurdistan Region, not just personally but also contributing to Kurdish society. But just as Nihad did, Kawani laments a lack of institutional support for young entrepreneurs.

He is unaware of any initiatives to support entrepreneurs who, he thinks, would benefit from a mentorship program combined with some form of funding. “This way then you’ll have businesses, good ideas, which you could develop and help the community.”

Right now, he said, getting funding is a major obstacle because of the financial crisis. People looking to develop a business idea rely on personal connections for financial backing. Or the work a day job to pay the bills and develop their own ideas on the side.

Kawani would like to see “Businessmen working together to be able to create an organization which will help start-ups,” some sort of mentorship providing both advice and financial support.

Sarkar Maghdid, 25, has also established a small business, a computer and mobile shop in Erbil called Zip for Computer. He was able to take advantage of a now-suspended government program providing financing for small businesses.

Maghdid received a 15 million IQD (about $12,700) loan through a program run by the Ministry of Labor and Social Affairs.

To apply for the program, he presented a business plan that was assessed by the ministry. On approval, he was given half of the funds. After two months, the ministry did another assessment – inspecting the shop and accounting for how Maghdid had spent the loan monies. Gaining their approval of what he had done in his shop, he was granted the second half of the loan.

“I had a plan in my head to open a shop, but not this big,” said Maghdid, speaking of how the government loan allowed him to realize his dream. “Right now, I have a good shop and business is good. But without the government’s help, I could not do this. I would have just a small shop for computers and selling things.”

Maghdid is now launching a training program to pass on his knowledge and computer skills to others.

The ministry’s loan program is temporarily on hold due to the financial crisis. But, as soon as funds are available, they will start it up again as the program was very successful, according to Mohamed Qader Hawdiani, Minister of Labor and Social Affairs.

Over the course of two years, 8,137 businesses benefitted from the loan program, the majority of which are storefronts or trades such as barbers, tailors, mechanics, Hawdiani detailed. In the future, they would like to expand the program to include the agricultural sector as well.

Under the program, business owners begin repaying the loan after one year and have six years to pay back the funds in full. Loans are typically between 4 and 15 million IQD with funds provided by the Ministry of Finance.

The ministry’s loan program does not, however, provide any business advice or mentorship Maghdid said. And it is unknown when the program will be able to restart.

In the midst of the financial crisis and the struggles they relate, the young entrepreneurs still persist however, determined to carve out success.

“I said I’m trying to make something for Kurdistan. You have to support me and not let me down,” Nihad said to the Chamber of Commerce.

He dreams of opening a women’s line of hair oils and being the first Kurdish business to open an online shop. “If I do this, I will be the first one to do this. This is the main thing.”