PDF generated on: Tue, Jan 31, 2012

Much More Can Be Done to Support SMEs, Says a New Report From Insight Discovery

In the GCC region, financial institutions have shied away from SMEs.

The upfront costs of hinder the setting up of SMEs.

More can be done to encourage entrepreneurship.

Further regulatory and legal reform can underpin a vibrant SME market.

Dubai, UAE, 30 January 2012: The challenges facing entrepreneurs who want to set up small and medium-sized enterprises (SMEs) in the Gulf Co-operation Council (GCC) are unnecessarily large, according to a new report from Insight Discovery, a market research company. 'SMEs and Aggressive Growth: What are the challenges that need to be overcome?' identifies the obstacles faced by SMEs and looks at what can be done to support them "In this part of the world, many of the entrepreneurs are expatriates, with strong links to other countries. The absence of modern bankruptcy laws across the region means that these people have a strong incentive to leave for good - and quickly - if things go wrong," said Nigel Sillitoe, CEO of Insight Discovery. The report is based on an in-depth consultation process with regional experts and SME managers. Partners include Gulf Finance, Grant Thornton and Links Group. Panelists included senior executives from some of our Partners and HSBC Bank Middle East, Envestors and two local SMEs, WMS Metal Industries and Zawya. Key findings include: Regional governments can harness the SME market to create employment opportunities. Relative to other parts of the world, the GCC governments do not have tax revenues that can be recycled as assistance to SMEs. Upfront costs that new SMEs must bear - such as licensing costs and visa fees are unnecessarily large. Office costs and other ongoing expenses are also high. As is the case for other businesses, finding suitable managerial talent is also a challenge. Although SMEs represent a huge opportunity for banks and financial institutions, SMEs are often seen as being too risky to support. Above all, greater access to finance is key. "SME's make a significant contribution to the economy and to employment, yet they currently account for only 4 per cent of total bank lending. The gap between supply and demand for financing means that many promising SME businesses struggle to fully capitalize on their growth potential," said Edward Allely, Managing Director of Strategy & Credit at Gulf Finance. "GCC governments must promote an environment that nurtures SMEs: this is essential to create the large numbers of new jobs that are needed across the region. This will also support the Emiratisation initiatives where the private sector is an integral part of the solution," said Hisham Farouk, Managing Partner of Grant Thornton UAE. Because the problems are identifiable, they can be solved. More can be done to promote a culture of entrepreneurship. The regulatory

and legal environments can be strengthened further, costs and fees that are set by governments can be reduced and databases and information sources can be enlarged. The report is based on a leadership roundtable that took place in Dubai in December 2011. The full report is available by registering at www.insight-discovery.com. Partners behind the roundtable were Gulf Finance, Grant Thornton UAE and Links Group. -EndsAbout Insight Discovery Insight Discovery specialises in gathering market intelligence for businesses through employee engagement and customer attitude surveys. Our clients are mainly from the financial services sector and include regional banks, investment banks, asset management companies, insurance companies and the largest private equity business in the Middle East and Asia. Insight Discovery adheres to ESOMAR's code of conduct, (the international organization of market researchers. Please visit http://insight-discovery.com About Gulf Finance Gulf Finance is one of the most active and prominent providers of financing to the SME market within the UAE, operating from offices in Abu Dhabi, Dubai and Sharjah. Over the past 13 years the company has provided over AED 3bn of funding to the small business market, and in 2011 alone has provided over AED 400m of financing to assist small business grow. Its product offering focuses on the provision of term financing to acquire or refinance capital equipment as well as working capital facilities to fund business growth. Gulf Finance is active across a variety of sectors including healthcare, manufacturing, logistics, media, education, transportation and infrastructure. About Grant Thornton UAE Grant Thornton UAE is a member firm of Grant Thornton International, one of the world's leading international organizations of independently owned and managed accounting and consulting firms, with USD4 billion global turnovers, providing audit, consultancy and accounting services to privately held businesses, including small to medium sized, and public interest entities. With 45 years of experience, GT UAE has considerable experience in various industries; manufacturing, retail, financial services, insurance, oil and gas, hospitality and tourism, and construction and real estate. About Links Group Established in 2002, Links Group is a premier company formation specialist advising corporations and individuals on how best to establish a legal commercial presence in the Middle East. It provides an unrivalled network of corporate services to assist the company formation process with a particular focus on the UAE and Qatar. This includes company formation, legal structures, licenses and visa documentation, serviced offices, resource management and marketing support. It is also the only company of its kind to be associated with the Foreign Investment Office (FDI) of the Dubai Economic Department. Links Group provides the essential steps to company registration: security, trust, expertise, professionalism and speed. About H+K Strategies H+K Strategies has been in the business of Public Relations for over 80 years. In January of 2011, Hill & Knowlton and Public Strategies merged to become Hill+Knowlton Strategies under the leadership of Global Chairman and CEO Jack Martin. H+K Strategies has over 85 offices in 46 countries all around the world. H+K Strategies has the largest network in the Middle East of all the major public relations agencies, with offices in Abu Dhabi, Dubai, Riyadh, Jeddah, Doha, Manama, Kuwait City, Istanbul, Cairo and African operations hubbed from the H&K office in Nairobi. H+K Strategies is a part of WPP, a world leader in the communications industry, with over 146,000 employees around the globe, and 2,400 offices across 107 different countries.

For more information, please contact: Nigel Sillitoe, CEO Insight Discovery

sillitoe@insight-discovery.com
04 311 7416 Heather Salmond, General Manger Hill+Knowlton Strategies

heather.salmond@hkstrategies.com
04 447 2805 Press Release 2012

Article originally published by Press Release 30-Jan-12

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