BizBahrain Magazine July-August 2018

Focus Feature | Economic Development
competitiveness of small players.
While the government is making key
efforts to boost SMEs, access to credit
remains a challenge. According to Oxford
Business Group’s Business Barometer:
Bahrain CEO Survey, released in March
208, nearly 30% of executives surveyed
described access to credit as difficult or
very difficult. A 2016 study undertaken
by the Bahrain Chamber of Commerce
and Industry similarly found lack of
fi n a n c e t o b e o n e o f t h e m a i n f a c t o r s
hindering SME development, while the
World Bank’s latest ‘Doing Business’
report cited credit access as a key issue
affecting private sector growth. Although
Bahrain ranked 66th out of 190 countries
in the 2018 ease of doing business index,
it ranked 105th in getting credit.
The country, however, has stepped
in with a series of initiatives to bail
out SMEs. In March last year the
Bahrain Bourse established the Bahrain
Investment Market (BIM), a platform
focusing on SMEs. To attract growing
companies, the BIM has more relaxed
listing requirements, including lower
minimum capital limits and fees.
Businesses looking to list on the
platform also only need a minimum of
three shareholders, compared to 100
on the main exchange. Furthermore,
the Bahrain Development Bank, which
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includes in its charter a commitment
to supporting small enterprises,
collaborates with Tamkeen to provide
loan assistance on interest payments
taken out by SMEs, while a new $100mn
venture capital fund of funds is expected
to be launched in the first half of this
year, targeting private investors support
for entrepreneurs and tech-based startups.
While efforts are being made to
encourage banks to lend to SMEs, some
industry figures say the issuance of
sovereign bonds could be another avenue
to pursue.
“This liquidity could also be
deployed to the financing of large
projects or some specific segments such
as SMEs. Banks should be encouraged
to increase lending in areas that boost
the local economy and strengthen
infrastructure, so that they have a
balanced strategy that is not excessively
risk averse,” Jean-Christophe Durand,
CEO of the National Bank of Bahrain,
told Oxford Business Group.
Tamkeen (Labour Fund) has been
supporting the growth of Bahraini SMEs
from 2006. Until now, the organization
has supported more than 140,000
individuals and businesses with 60%
of assisted businesses being startups.
Tamkeen has also helped SMEs build
networks with the private sector entities.
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In a new initiative supported
by Tamkeen, Flat6Labs, a regional
startup accelerator program and seed
investment company that fosters
and invests in bright and passionate
entrepreneurs with cutting-edge ideas,
launched their Bahrain office. It provides
seed funding, strategic mentorship, a
creative workspace, a multitude of perks
and entrepreneurship focused business
training and directly supports startups
through an expansive network of
partner entities, mentors and investors.
Flat6Labs has created an environment
where entrepreneurs can advance their
company in incredible pace and in a
short period of time. Flat6Labs currently
has accelerator programs and seed funds
in Cairo, Jeddah, Abu Dhabi, Beirut, Tunis
and now in Bahrain.
Tamkeen’s Chief Executive Dr.
Ebrahim Mohammed Janahi stressed the
importance of supporting this initiative
as new players in promoting Bahrain’s
startup ecosystem. “Accelerators are
currently playing an active role in
supporting startups and creating clearer
perception of potential growth and
opportunities available to businesses. We
believe with the establishment of these
accelerators in Bahrain, we are bridging
a gap that will transform Bahrain’s
Economy.”
In a major boost to the startup
ecosystem, the Bahrain Development
Bank (BDB) announced the successfully
wrap up of a $100 million fundraising
round for the Al Waha Fund of Funds.
The new development marks a big leap
forward for Bahrain and rest of the
region as it paves the way for allocation
of additional funds to deserving
technology-driven startups from all
across the region. The Limited Partners
(LP) Advisory Committee comprising
Bahrain Development Bank (BDB),
National Bank of Bahrain (NBB), Batelco
Group, Mumtalakat, and Tamkeen
Bahrain, among others, got together to
see the LP allocation of $35 million into
a select few venture funds as a starting
point. The initiative is doubtless another
major boost to the Bahrain government’s
ongoing efforts to push the Kingdom’s
economy to new highs under the
Economic Vision 2030 roadmap.
July-August 2018
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