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Latest News / Poor access to electricity and finance hampers MENA’s SMEs

 

Compiled by the European Bank for Reconstruction and Development, the European Investment Bank, and the World Bank, the What’s Holding Back the Private Sector in MENA? Lessons from the Enterprise Survey questioned 6,000 manufacturing and service industry firms about the key areas creating barriers to success.

The report concluded that a key area which would contribute to the challenges was increasing the amount of formalised businesses by making the process easier and more accessible to start-ups, adding to greater transparency and supporting governments and organisations to identify areas to prioritise help.

Another finding was that the 58% of businesses categorised as ‘disconnected firms’ - firms which do not apply for any additional credit because they have sufficient funds - were having a negative effect on wider economic progress as they limited their own opportunities for growth and do not fulfil their potential for income or job creation. They sign-posted reducing the risk of borrowing for these types of firm as a strong option for improvement.

Exporting was identified as a key area which presented opportunities for businesses in the region. Whilst the region boasts a high percentage of companies exporting, the productivity this adds to performance is low. One particular area which the researchers felt would support start-ups was a greater openness to foreign ownership to break through this barrier, commenting, “More open approach to FDI (foreign direct investment), as foreign ownership is also a means for acquiring knowledge and introduce innovation in the market.”

 


 

Poor access to electricity and finance hampers MENA’s SMEs
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