PRESENTATION ON ENTERPRISE DEVELOPMENT AND SUPPORT FACILITY (Bahrain Model)

Promoting SMEs : The Need, Issues and the Support Requirements Small and Medium Enterprises (SME), play a crucial role in the overall economic development of the Kingdom. To sustain the ongoing process of SME development it is important to continue with identifying and encouraging the entrepreneurial potential in the society and strengthening it further. Enterprising talents need to be nurtured carefully by creating a balance between helping / hand holding / supporting and guiding with an ultimate aim of creating a confident and independent entrepreneur who is able to identify, plan, implement and create a sustainable business enterprise. It requires a proper SME support structure that offers complete range of services to SME entrepreneurs comprising a mix of financial and non-financial development services.

SME DEVELOPMENT MECHANISM PhaseServices Pre-FinancingBusiness counseling support to assist the entrepreneur client in business idea finalization, information collection, business planning, business licensing & registration, financing application & process guidance and networking. FinancingAssisting the entrepreneur client in completing financing application, financial counseling and linking the project to appropriate development financing scheme. Post-Financing Assisting the entrepreneur client in business implementation, networking & business linkages, business incubation, progress monitoring, business growth counseling and training.

BAHRAIN DEVELOPMENT BANK Entrepreneur/Enterprise Development Interventions Awareness/Orientation/ Motivation/Career Stage Information/Decision Making/Planning Stage Resource Mobilization / Implementation Stage Business Development / Growth Stage Presentations on Entrepreneurial Opportunities & Business Support Services Print Publication & Media Coverage on Services / Activities Education Finance Entrepreneurial Education Training / Capacity Building/Business Counseling Business Advisory Services Business Planning Information Sharing / Networking Business / Financial Counseling Project Financing / Equity Participation Institutional Linkages Business Incubation Project Implementation Support Monitoring / Support Services Expansion / Modernization Financing Market Information / Business Linkages / Networking Business Management Tools Growth Advisory / Training Services

THE SME DEVELOPMENT APPROACH Establishment of Small Business Support Unit and Business Advisory Unit within the bank. Focus on the Enterprise Feasibility as well as Entrepreneurial Capability of the client entrepreneur. Developing a Team of Business / Financial Counselors within the bank. Focus on Start up Entrepreneurs Developed through capacity building and business counseling interventions. Establishing & spreading the network of SME Service Centers across Bahrain. Building & strengthening network linkages with development institutions to facilitate SME support services to client entrepreneurs.

Training “Entrepreneurs are not only born but they can be trained and developed ” Course Outline Setting up a small enterprise (rules, procedures, formalities) Setting up a small enterprise (rules, procedures, formalities) Business opportunity identification (screening, firming-up) Business opportunity identification (screening, firming-up) Market assessment Market assessment Entrepreneurial competencies (strengthening soft skills) Entrepreneurial competencies (strengthening soft skills) Business plan Business plan Essentials of managing a small enterprise Essentials of managing a small enterprise Inputs on how to implement a project Inputs on how to implement a project

Business Advisory / Counseling Services & Technology Tie-up Entrepreneurs are assisted in Finalizing their business ideas Finalizing their business ideas Developing their own business plans Developing their own business plans The process of project implementation The process of project implementation Technology tie-ups Technology tie-ups Business partnerships (Joint Venture collaborations) Business partnerships (Joint Venture collaborations) Seeking necessary licenses and completing legal documentation Seeking necessary licenses and completing legal documentation The duration of this process depends on the needs of the respective entrepreneur as identified by the business counselor and the entrepreneur

Financial Services Financial Services Appropriate financial linkage is identified based on project requirements and entrepreneur’s investment capability Need based advice and support is provided by the financial counselor in association with the business counselor

Business Development Services & Advisory for Business Growth / Business Incubators Essential linkages are facilitated with institutions dealing with infrastructure services Guidance and support on issues related to procurement, installation and commissioning the business Business Counselor and Financial Counselor closely monitor the project implementation process Projects requiring basic infrastructure services offered by the business incubator and found suitable, are selected and facilitated to operate from the incubator

Bahrain Development Bank - Group PROJECT FINANCE EQUITY ISLAMIC FINANCE EDUCATION AGRICULTURE FINANCE FISHERIES IT TRG CERTIFIED PROGRAMS SKILL UP GRADATION / EMPLOYMENT BUSINESS INFRASRUCTURE ADVISORY LINKAGES SUPPORT SERVICES TRAINING / CAPACITY BUILDING BUSINESS ADVISORY, BUSINESS PLAN AND SUPPORT SERVICES BIT BANK BDB GROUP BBIC EDP

BDB - Institutional Network The Bank facilitates provision of developmental services to its SME clients through a close network of institutions BCCI UNIDO MOIC BDB BYEA BIC EDB BBWS

Eligible Sectors Manufacturing & Industry Sectors Service Sectors Small Traders (on selective basis) Tourism Sector Professionals (Health care, Education, Architecture, Engineering) Health care & Education Agricultural Sector Fisheries Sector

Financing Criteria PurposeStart-Ups; Expansion; Modernization ModeTerm Loan, Working Capital Loan / Composite Loan, Indirect Finance, Equity Finance, Islamic Structured Finance & More. RepaymentUp to 10 Years with Moratorium up to 2 Years Debt Equity Ratio Not to exceed 3:1 Extent of Project Financing - Maximum Loans up to BD 50,000 = 90% of Total Project Cost Loans up to BD 500,000 = 50% of Total Project Cost Interest RatesCompetitive Rate. OthersProject Based in Bahrain; Registered with Licenses; Business plans required

Special Features Competitive Interest Rates Range of Financial Products Free Business Advisory & Financial Consultation Services Bridge Relations Between Entrepreneurs and Investors Financing New & Existing Projects Availability of Short Term and Long Term Loans Long Repayment Period (up to 10 years) Comfortable Grace Period Strong Links with Government Organizations Help in Identifying local partners for foreign investors (Joint Ventures) Business Incubator Facilities for businesses’ early stages at affordable costs High-risk taker

THE OUTCOME AND ACHIEVEMENTS

PROJECT COST SUPPORTED

NUMBER OF LOANS

JOB CREATION

VALUE ADDED

Conclusion Provision of appropriate SME finance products together with non-financial development support services provide a good framework for SME creation and development. Effective use of a need based development strategy proves to be instrumental in encouraging and nurturing entrepreneurial potential in the society and facilitating conversion of business ideas into sound business plans and to real business entities thereby contributing meaningfully to the ongoing economic development process. The SME development strategy has a multiplier effect helping reduce the unemployment by promoting self employment and generating additional employment opportunities through creation of SMEs.

Bahrain Development Bank : “ You are not alone ” !!