It is no longer unusual to be an entrepreneur in the Middle East. The Arab Spring has encouraged many young people to start their own businesses, especially as traditional employment routes fail to deliver.
Recently, one of the region’s newspapers summed up the situation as follows: “Youth have found a means to unleash their potential through what the Kauffman Foundation described as ‘not everything when it comes to job creation, but the only thing’ – start-ups.”
In the Middle East, entrepreneurs face numerous challenges when starting up a business. These include dealing with complex legal frameworks, difficulty in accessing capital, and the lack of female participation in entrepreneurial activities.
Many of the region’s start-ups are in the information and communications technology (ICT) industry, and Jordan has become an ICT hub. Its colleges and training institutes foster innovation and technological transfer, and investment firms such as Oasis500 “support entrepreneurs by providing them with investment, training and mentorship in an effort to accelerate the transformation of their business ideas and start-ups into high-growth companies in the ICT, digital media and mobile sectors”.
Oasis500’s investments include Masmou3 Audio Books, website translation service Dakwak, real-estate specialist Aqar Estate and Arabia Weddings, an online portal for wedding planning.
Gaining access to capital is one of the most pressing issues for start-ups in the Middle East. Banks are reluctant to lend to them and, apart from approaching investment firms such as Oasis500, there are few options.
It is interesting, therefore, that both Qatar and the United Arab Emirates have said they intend to establish an exchange for small and medium-sized enterprises (SMEs). In January 2012, the Qatar Exchange announced that the SME exchange was ready in terms of its technical and regulatory requirements to receive listing applications from SMEs in other GCC countries, as well as Qatar. Neither exchange has opened for business yet.
Lucia Dore is the head of GCC and Middle East at mergermarket, part of The Financial Times Group. E-mail: firstname.lastname@example.org