Jamal Oulel: on helping young people to get out of problematic debt.
Jamal Oulel is the founder and CEO of Socialdebt, a social enterprise with the mission of removing profits from collecting debts. Observing firsthand the impact of poverty and debt, he saw the need for a solution that will stop the debt from increasing further and how the business of debt collection has to be changed.
At just 18 years old, Jamal began his entrepreneurial journey by founding JobTease. “We had several storefronts at schools in Rotterdam where young people could knock on the door to get help buying their books and study materials.” In doing this work, Jamal noticed the association between these young people and additional struggles, namely a lack of jobs, debt, and substance addiction.
Seeking to help these young people even further, he switched focus and started to connect them to the labor market. “I was an entrepreneur for a period of about 8 years up until 2016. At that point, I was experiencing many personal problems and my place in the company was uncertain, so I left.”
After leaving JobTease, Jamal found himself experiencing debt for the first time, despite helping so many others through similar situations. A phone call with a debt collector raised red flags when they attempted to unlawfully charge him four times the standard fee for an unpaid debt.
“Experiencing debt myself and seeing the commerce behind it was really disturbing. In the Netherlands, we spend 17 billion a year to solve 4 billion worth of debt.” It was this personal experience that led Jamal to found Socialdebt in 2020.
NO PROFIT from debt before 2030
Socialdebt acts as a pause button for the outstanding bills of young people between the ages of 18 and 27. Their long-term aspiration is for nobody in the Netherlands to make a profit from debt before the year 2030. “We focus on young people between 18 and 27 because we want to stop the intergenerational debt. If your parents have debt, there’s a 40% chance you will too, which is why we target people before they have children.”
In the Netherlands alone, around 600,000 people between the ages of 18 and 35 are facing issues of debt. Their approach to solving this problem is twofold. Socialdebt takes an educational stance but also helps by removing the immediate problem of the current debt that young people are facing.
“It’s educational, but more in the sense of rewarding good behavior. The current system is based on fear and fines whereas ours is based on rewards” explains Jamal. They pay the bills of their target audience up to the value of €2.500, which is then paid back over time without fees and without fines. In addition, they reward positive behavioral changes such as finding a job, attending school, or working on mental health issues. These actions are then recognized by Socialdebt in reducing the fees they need to pay back.
“We promise to solve all of someone’s debts within a week. We do this by negotiating with the debt collectors to pay off the debt as soon as possible. Most of our cases are solved within 24 hours.” Offering to pay off the debt quickly means that debt collectors are often happy to negotiate and lower the amount owed with only a small margin, making it a win-win situation.
Discussing the challenges of funding a social enterprise
Unsurprisingly, Socialdebt is a company heavily reliant on capital, not only to be able to pay off the debts of young people but also to finance the organization itself. Jamal doesn’t downplay the difficulties he experienced when setting up the company.
“When I stopped with my last enterprise in 2016, I went from a good income to no income, so I really had to focus on my basic needs before starting a company again.” This meant that for the first two years, alongside starting Socialdebt, Jamal worked for 24 hours a week at Starters4Communities and GLOW UP! Rotterdam in order to support himself and have a steady income.
In the initial phases, Socialdebt received a grant from the municipality of Rotterdam and then from the Department of Poverty. “We were really bootstrapped, we did everything with €50.000 for two years.”
This October everything came together for Socialdebt. MT/Sprout wrote an article that news about their work spread quickly, which led them to be discovered by Nationale-Nederlanden (NN).
It was then that they were contacted by NN to become the first company to receive support from their Social Innovation Fund, a pot of €5M to fund start-up social enterprises that are helping financial, physical and/or mental well-being.
Planning and experimenting
Receiving only philanthropic funding has been a key aspect of their business model. “We don’t have any shareholders which I think is great because we are a foundation and I think that also hits on your statement of steward ownership.”
At some point, Socialdebt is seeking to move towards a cooperative business model. “We are a foundation, but if you look at how we are structured, we already work as a cooperation” explains Jamal, referring to the financial value of the investment they receive in the form of advice, from design to legal structure.
“When we started, we really wanted to focus on peer-to-peer lending, however, we parked it because of the difficulties with permits.”
Ideally, Jamal is still seeking to experiment with a model where local Rotterdammers can help each other through difficult moments.
Listen to the Up!Rotterdam podcast with Jamal below, or check all the episodes of the Up!Rotterdam podcast here: https://podcast.uprotterdam.com/