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Tamkeen and Bahrain Development Bank boost SME support with crucial support initiatives

by mahmood on 23/06/09 at 5:12 pm

Feasibility Study Support and Pre-Seed Capital Support pilot schemes open doors for promising entrepreneurs.

Sanabis, June 21, 2009: In accordance with the National Economic Strategy 2009-2014, a realization of the strategic initiatives “Establishing Entrepreneurship Grants” and “Funding Feasibility Studies” has taken place with the inauguration of two pilot initiatives as a result of the partnership between Tamkeen and Bahrain Development Bank. A signing ceremony took place launching two pilot schemes: the “Financial assistance for feasibility studies of SMEs” and the “Pre-Seed Capital Support” schemes to allow SMEs access to life-giving capital to jump-start their commercial project at the innovation development stage, a move that will tackle two obstacles in the way of sustained growth for SMEs.

The schemes will be managed by joint Tamkeen-BDB committee, however, the bank will run the day to day operations. Tamkeen and BDB will contribute 50% each (a total of BD 100,000 budget) of the core funds and also serve as a channel for deserving entrepreneurs.

An agreement to this effect was signed today by Tamkeen’s Chief Executive Abdulellah Al Qassimi and BDB’s CEO Nedhal AlAujan.

Under the feasibility study support scheme, companies with a capital outlay of more than BD100,000 or those that present new products/services or new technology with significant economic and social value can avail of up to BD 5,000 to complete a comprehensive and accurate feasibility study that is a compulsory part of any loan application.

The second initiative, “Pre-seed Capital Support” is a very ambitious initiative that will provide basic financial start-up support of up to BD 5,000 for materials, rent and other related expenditure to 20 innovative start-up companies. Again, Tamkeen and BDB will share the budget for this BD 100,000 pilot initiative on a 50:50 basis.

For both the schemes, evaluation of candidates will be done jointly by Tamkeen-BDB steering committee.

Added BDB’s CEO Nedhal AlAujan, “These two projects reflect the commitment of BDB to the Kingdom’s progress and with Tamkeen’s knowledge of the market and BDB’s ability to support and nurture industry and enterprise, we have no doubt these two pilot projects will unveil a rich seam of growth among the Kingdom’s SMEs.”

“Tamkeen and BDB have a rich partnership that directly supports SMEs and entrepreneurs in the Kingdom,” commented Tamkeen Chief Executive Abdulellah Al Qassimi, “The Feasibility study support scheme and Pre-seed Capital Support are vital links in the growth chain for SMEs and start-up ventures, helping them to make a strong case for enhanced development support and to generate viable prototypes of their products and services so that they can then present these models to gain greater institutional support. We are confident that the pilot schemes will deepen into permanent projects that will strengthen the National Economic Strategy 2009-2014.”

About BDB:
BDB is a specialized financial institution in financing small and medium enterprises and support the entrepreneurship sector in the kingdom, the bank commenced operations in early 1992 and it offers integrated products and financing programs which includes direct financing, joint venture, Islamic financing and SME financing program in cooperation with Tamkeen, in addition the bank participated in the capital of Venture Capital Bank SME fund with 20%. BDB offers training &consultation services in the business management field along with other financing products including education financing and pilot training financing scheme along with agriculture loans.

Tamkeen:
Tamkeen (Labour Fund) is a semi-autonomous yet independent authority which formulates strategic and operational plans to enhance the overall prosperity of Bahrain by investing in Bahraini employability, job creation and social support. Tamkeen is funded by the fees collected by the LMRA.

Tamkeen’s main objectives are to support Bahrainis to become the employees of choice, and to support high quality private sector job creation

To achieve these objectives, Tamkeen will invest in the cost and quality competitiveness of Bahrainis (e.g., reduction of cost of employing Bahrainis relative to expatriates, investment in skill and work ethic development programs of Bahrainis); in tackling employment barriers on both employer and labour market entrants’ sides through a combination of financial incentives and capability building, and in supporting the private sector’s adjustment to new cost structures by providing access to capital to alleviate short-term cash constraints or improve productivity, and in know-how initiatives that support improvements in productivity and decreased reliance on expatriate labour through spreading management and technical knowledge.

Up to the end of March 2009, Tamkeen is investing more than BD 70 million in more than 30 projects targeting more than 19,000 Bahrainis and 5,700 SMEs. Programmes are continuously being devised as per Tamkeen’s strategy and the numbers of beneficiaries are continuously increasing.