Qatar steps up support for small businesses

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A drive to encourage entrepreneurship in Qatar is gaining pace, as efforts to streamline the start-up process yield results.

Developing small and medium-sized enterprises (SMEs) lies at the heart of Qatar National Vision 2030, the development plan guiding the country away from its reliance on hydrocarbons and toward a knowledge-based economy.

With the first SME programmes now firmly established, experts hope to see efforts stepped up to make business education a priority at schools and colleges.

Targeting funding

One of the institutions playing a key role in supporting SMEs, particularly those founded by new graduates, is the Social Development Centre (SDC), which aims to promote employment opportunities and youth empowerment.

“The main goal will be to encourage entrepreneurship among young people, so they can act as ambassadors for private sector development,” Abdulla bin Ibrahim Al Ajail, executive director of the SDC, told OBG.

The centre offers a mix of financial and technical support ranging from promotion and consulting to marketing and training at its Tanmia for Small and Medium Enterprises facility.

The SDC is currently directing its assistance programmes at small-scale, or “micro”, entrepreneurs and those between the ages of 18 and 40, as well as home-based businesses, with the centre’s funding arm, Rasameel, offering interest-free loans of up to QR500,000 ($137,400) for applicants who meet its criteria.

An at-home incubation programme has also been launched, which allows microbusinesses to channel their products into local markets and souqs.

Many of the centre’s clients run microbusinesses, which usually have 15 staff or less, and a turnover of under QR10m ($2.75m). As these businesses are often family-run and are rarely capital intensive, they are traditionally seen as lower risk.

Nurturing entrepreneurship

Qatar Business Incubation Centre (QBIC), an initiative co-founded with Qatar Development Bank (QDB) and the SDC, supports small businesses in their early days through a two-step training programme, offered twice yearly. QBIC also offers workspaces, training, marketing and follow-up guidance, with financial support from QDB.

LeanStartup, QBIC’s initial 10-week flagship programme, focuses on supporting entrepreneurs through the launch stage of their businesses and includes a “Demo Day”, where candidates are given the opportunity to pitch their ideas. Once applicants are ready to take their business to the next stage, they move to the four-day LeanScaleup programme.

According to Aysha Al Mudahka, CEO of QBIC, the business ideas put forward have been broad-based, ranging from digital solutions to tourism.

“The variety in age and gender of applicants and the quality of their ideas has been a huge positive for broader SME development in the country,” she told OBG. “We’re well on our way to achieving the centre’s mission of developing the next QR100m ($27.5m) companies in Qatar.”

To provide a boost to start-ups in specific industries, the centre has developed specialised incubators, such as QBIC Tourism, guided by Qatar Tourism Authority, and Digital and Beyond, powered by Ooredoo, which offer entrepreneurs sector-specific support and access to industry experts.

In financing terms, QBIC also has a fund for direct incubation of applicants that reach an appropriate level of business development. Subsidised workshop space is also made available to entrepreneurs looking to develop light manufacturing businesses.

To date, the results of the two initiatives appear promising. The SDC has financed approximately 105 projects since 2009, having been given a target of around 20 new projects a year and a funding portfolio of QR8m-9m ($2m-$2.5m). QBIC, meanwhile, has received some 1200 applications and incubated 52 start-ups since its launch in 2014.

“We’ve invested QR1.9m ($521,798) in our successful applicants, which have in turn generated nearly QR6m ($1.65m) in revenue,” Al Mudahka said. “This is a reflection of the opportunities that exist for start-ups to generate tangible economic value.”

Cultivating a start-up culture

The entrepreneurial environment in Qatar has significant room for growth, though much will likely need to be done to encourage more Qataris to participate.

The country has a relatively small number of SMEs for the region, contributing just 16% to GDP, as per regional media reports, compared to 33% in Saudi Arabia and 60% in the UAE.

Businesses face a complex operating set-up with several organisations and programmes involved in SME development. Representatives believe much would be gained by bringing players under one roof.

“Streamlining activities is a necessity when looking at a sector of this nature, given that each organisation within the ecosystem has a different focus,” the SDC’s Al Ajail told OBG.

Education and training also has a key role to play in developing a new enterprise culture, according to Al Mudahka, who would like to see young Qataris given more opportunities to learn about the business world.

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