What is the next step for improving funding conditions for MENA entrepreneurs?

Though the investment scene for MENA’s entrepreneurs is evolving, large gaps remain. In the 2013-2014 World Economic Forum Global Competitiveness Report, business executives surveyed from Tunisia, Morocco, Egypt, Jordan, the UAE, Saudi Arabia, Qatar, and Kuwait all rank access to financing as one of the top five problems to doing business. The World Bank, in a 2011 report, points out that bank financing for small to medium-sized enterprises is a major problem in the region; only 8% of total lending goes to SMEs.

However, the conversation on improving funding conditions for MENA’s entrepreneurs is not simply one of increasing access to funding, but also finding specific investment sizes and establishing strong relationships with investors. The Wamda Research Lab’s recent report – The Next Step: Breaking Barriers to Scale for MENA’s Entrepreneurs – suggests that additional facets to the equation need to be considered to effectively improve conditions for funding entrepreneurial ventures in MENA.

The WRL’s report is based on a survey of over 900 entrepreneurs and experts in the MENA region. It is structured around a series of questions about the most significant barriers to scaling business in the region. Respondents were asked to choose whether obtaining investment, generating revenues, building a team, and expanding geographically is their biggest obstacle to scale. Twenty-four percent of entrepreneurs and 28% of experts chose obtaining investment. At an industry-level, 30% of information and communications technology (ICT) companies surveyed, as well as 26% of scaleups (defined as a company older than three years old and with employment growth of 20% or more), also chose obtaining investment.

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What is the next step for improving funding conditions for MENA entrepreneurs?