Middle East and North Africa

One in three start-ups in the Arab World is led by women—a higher rate than in Silicon Valley, according to an IFC article. Improving access to finance and promoting digital platforms are key to helping them succeed. The article says that many entrepreneurs from the region believe that technology is one of the few spaces where everything is viewed as possible, including breaking gender norms, and is therefore a very attractive industry for women.

Dubai-based Dar Al Tawreeq, part of Tawreeq Holdings, has launched a new working capital programme that aims to facilitate funding and liquidity to SMEs in the Mena region. Under the name InvoiSME, the sharia-compliant receivables financing programme is offered through the company’s cloud-based Tawreeq supply chain finance platform.

Beehive and Eureeca are using online crowdfunding to raise debt and equity for small businesses in the Middle East. Becoming regulated will allow them to grow rapidly. In time, they could eat the banks’ lunch, or the banks just might swallow them.

Women entrepreneurs in the Middle East face far greater challenges than men when trying to access financial services. This is especially concerning, as many of the sectors that are critical for economic growth in the region rely heavily on women.

By Simon Bell, Global Lead for SME Finance, Finance & Markets - World Bank Group

I recently attended an SME Conference in Jordan around SME Finance and Employment – extremely important issues in a troubled region.  All participants agree that much more needs to be done to address the lack of jobs in the region and to increase financial access at all levels, to individuals, households and small and medium scale enterprises (SMEs).

As part of the Arab Credit Reporting Initiative (ACRI), a joint initiative between IFC and the Arab Monetary Fund (AMF), this guide maps progress and provides an overview of the credit reporting systems in Arab countries. The guide includes a new index representing a quantification of the status credit reporting in each country.

The report entitled “Trade and Access to Finance of SMEs: Is there a Nexus?” co-authored by Hala El-Said, Mahmoud Al-Said and Chahir Zaki underlines that, despite the banking reforms initiated in Egypt in 2004, SMEs’ access to sufficient and appropriate financing remains limited. This represents a handicap for these SMEs to access the international markets, with only 6% of them exporting their products or services.

The “Arab Spring”, which took root in Tunisia and Egypt in the beginning of 2011 and gradually spread to other countries in the Southern Mediterranean, highlighted the importance of private sector development, job creation, improved governance, and a fairer distribution of economic opportunities. The developments led to domestic and international calls for the region’s governments to implement the needed reforms to enhance business and investment conditions, modernise their economies and support the development of enterprises.

Mandeep Vohra from Standard Chartered Bank outlines the various risk management approaches for banking SMEs and the need to have a distinct team of SME Risk specialist.This presentation was given during a conference jointly organized by The Arab Monetary Fund and IFC on “Building a High Performance Small Medium Enterprise Business in the Arab World” on 7-8 May 2013 in Dubai, UAE.