The FINANCIAL — A new IFC-supported report by Wamda Research Lab finds that although support for entrepreneurs and start-ups has grown substantially across the Middle East and North Africa, many challenges remain, hindering job creation and economic growth.
In Exploring Conditions for Entrepreneurs in Egypt, Jordan, Lebanon, and UAE Wamda surveyed nearly 500 entrepreneurs from the four countries, which have seen the majority of entrepreneurship development initiatives in the region. Published in partnership with Endeavor Insight and Beirut Digital District, the report looks at the main trends in entrepreneurship and the challenges entrepreneurs face in growing their businesses, according to IFC.
Jamil Wyne, Head of Wamda Research Lab said: “Our research suggests that more and more players are realizing the economic and social returns that supporting entrepreneurship can have on cities, countries, and the region. Addressing the challenges entrepreneurs face is critical to achieving economic and social development. We hope our work will help investors and policymakers better understand the challenges so they can continue to help the sector grow.”
Access to finance is one of the main challenges cited by entrepreneurs in the report, with 43 percent relying on funding from family and friends, and nearly all relying on personal savings to at least partially fund their companies. The report identifies three other main challenges: generating revenues, finding the right talent, and expanding across borders efficiently.
Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa said: “Fostering a favorable business environment for small businesses and entrepreneurs is one of IFC’s strategic priorities in the region, since they not only drive growth but help bring in innovation, contribute to job creation and increase regional competitiveness.”
The Wamda report also reveals that new funds and investments in entrepreneurial ventures have increased significantly. Over 80 percent of new institutions that support entrepreneurs, created since 2010, have been launched by local MENA stakeholders, with over 60 percent of these created in Jordan, Egypt, Lebanon and the United Arab Emirates.
The initiative is part of IFC’s wider strategy in the region that aims to support small businesses, encourage entrepreneurship, expand access to finance, and create jobs. In February 2015, IFC invested $10 million in a venture fund created by Wamda Capital, a sister company, to provide funding to tech entrepreneurs in MENA. Such support is considered vital in a region where smaller businesses often struggle to tap into expertise and secure the financing they need to grow.
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