Small and medium-sized enterprises (SMEs) and startups are the main drivers of economic growth, creating jobs and generating income, and also play an important role in alleviating poverty and reducing unemployment, particularly among young people. According to the World Bank, SMEs that operate in the Public sector contribute to about 60% of total employment and to about 40% of the national income in emerging economies, and contribute to creating 4 out of every 5 new jobs in the public sector. This ratio increases significantly when calculating the contribution of SMEs operating in the private sector economy.
In the Arab region, World Bank reports indicate that there are more than 21.3 million enterprises in the MSMEs category. These projects contribute more than 50% of the GDP of the region (in Jordan it contributes to about 45% of the total GDP). MSMEs share of the total number of establishments is between 90% and 99%. They are considered also a major contributor in employment in the Arab region as a whole, accounting for 20 to 40% of official employment in the private sector, and may reach 16% of total employment, including employment in the public sector and non-governmental organizations.
Experiences all over the world, including the Arab countries, has shown that SMEs and startup companies are more resilient to the changes, crises and economic fluctuations than large enterprises. Subsequently, to promote this sector and to activate its developmental role in general, and its role in creating employment opportunities in particular, should be a pivotal objective for the Arab countries, because of its importance in combating unemployment (unemployment rate in the Arab world is 10% and 28% among Arab youth) and for its contribution in increasing the industrial added value, enhancing the competitiveness of the productive sector, enhancing innovation efforts and diversifying the economy. Startup companies in the Arab public & private sectors are witnessing steady growth and are undertaking important steps to enhance these companies.
UAB, and through its quest to develop and enhance SMEs & Startup companies, found out that the Arab countries should adopt several measures aimed at supporting these companies, such as establishing credit records and funds, providing subsidized loans and secured loans, building and upgrading technical and human capacities, facilitating registration and licensing procedures, develop mechanisms for loan Guarantee, etc… However, there are many challenges facing the growth and competitiveness of SMEs in the Arab countries, some of which are the lack of expertise and skills, the weakness in export potentials and dealing with external markets, weak innovation and slow adoption of modern management and ICT.
The real challenge facing SMEs and emerging companies in the Arab region remains access to finance because of inadequate safeguards arrangements and credit information infrastructure in many Arab countries, making it difficult for banks to properly assess risks, as well as gaps in frameworks To enforce contracts that increase potential losses of banks in defaults. The high rate of non-performing loans in a number of Arab countries could lead to tightening credit policies of banks and make them more selective and conservative in the management of their credit portfolios.
UAB forum on “Financing SMEs & Start-up Companies” seeks to highlight the importance of this sector for the economic growth and development of the Arab region and to discuss the challenges of growth of these projects and companies, especially the financing constraints, and how to create an environment conducive to their growth and development in order to play a bigger role. In creating jobs, specifically how to work with banks and financial institutions to develop their financing mechanisms.
TOPICS OF DISCUSSIONS
Strategies and mechanisms to support and finance SMEs and start-ups.
- Financial inclusion policies as a platform to support MSMEs and to develop creativity and innovation.
- The role of the banking sector, international financial institutions and risk-guarantee institutions in supporting and financing SMEs.
- Developing human and technical capabilities.
- Developing loan guarantee mechanisms.
- Developing social responsibility mechanisms in our Arab banks.
STRUCTURE OF THE FORUM
- Presenting working papers and panel discussions moderated by senior bankers, businessmen, and firms interested in SMEs and START-Up Companies, in addition to financial and banking institutions.
- Real life case studies presented by entrepreneurs about establishing and managing SMEs.
- An exhibition accompanying the forum, which includes the sponsoring institutions, allowing for the establishment and development of commercial relationships.
PARTICIPATING IN THE FORUM
- By attending this forum and benefiting from the valuable discussions brought by internationally renowned speakers, and meeting fellow peers from the regional and international fronts
- By sponsoring the activities of the forum and benefiting from the wide range of privileges (marketing, branding, media recognition, etc…)