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Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
Providing Linkages for Growth
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Providing Linkages for Growth

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  • In the MENA region, the number of financially sustainable micro-credit institutions at the end of 2003 was 17, compared to 11 at the end of 2002 and 7 at the end of 20014; should this trend continue in 2005, this figure could increase to 25. 60-70% of the customers are women. Morocco is the regional leader, closely followed by Egypt: Facility for the Euro-Mediterranean Investment and Partnership (“FEMIP”) managed by the EIB intervened in Morocco to support the micro-credit. The Palestinian Authority also took initiatives in this area. Variety of measures to address the financing gap, direct and indirect: Enhancing the coverage and accessibility of credit registries Establishing a code of corporate governance, listed and non-listed companies Providing guarantees for private sector lending Supporting young enterprises through indirect measures (business incubators, technoparks, etc.) Encouraging the development of a private equity/venture capital industry (MENA-OECD Policy Brief) Encouraging foreign lines of credit Supporting micro-credit schemes Financial education projects Adoption of alternative models such as export credits, leasing and factoring Encouraging the growth of stock exchanges through privatisation and other means
  • While the financing gap is widely acknowledged to exist in the MENA region, and is perceived to constitute a significant obstacle to enterprise development and innovation in the MENA region, the extent of it is presently unknown ( similar problem in OECD member countries (SME Financing Gap Study, OECD, 2006). To date, there have been a dearth of cross-country comparisons of specific financing limitations, thereby stymieing any possible regulatory change or action by the financial community. Under the mandate from its EFN, the MENA-OECD Investment Programme would like to reconcile this shortcoming by conducting a quantitative study on challenges facing entrepreneurs, and the role of private equity and other financing mechanisms in bridging a possible gap. Financing instruments to be considered: Debt instruments (bank loans, corporate debt issuance; long-term and short-term) Equity instruments (private equity, venture capital) Factoring/Leasing Export credits Guarantee funds Micro-credit Government instruments The study is envisioned to cover the Gulf GCC countries (Kuwait, Qatar, Saudi Arabia, UAE, Bahrain, Oman), Jordan, as well as 2 North African countries (Egypt and Morocco). The study is envisioned to be carried out throughout the period of approximately 3-5 months, with the assistance of the regional networks of the Programme, consultants from the individual countries, where necessary, and feedback from the Enterprise Financing Network. The study would be based on quantitative and qualitative analysis of the potential financing gaps in the six mentioned countries. Research efforts will concentrate in surveying existing venture capital companies, technology parks, incubators, entrepreneurial associations, universities, chambers of commerce, relevant state authorities as well as certain financial sector institutions. The study would be aimed to reveal the gaps, if any, in enterprise financing at the various stages (angel, seed, startup, early stage, pre-venture capital), considering the sectoral orientation trends of the new start up companies and the financial resources made available to them by existing financing institutions. Furthermore, any obstacles in the regulatory environment in relation to creation of start up financing mechanisms and in general conditions for entrepreneurship wil be highlighted.
  • While the financing gap is widely acknowledged to exist in the MENA region, and is perceived to constitute a significant obstacle to enterprise development and innovation in the MENA region, the extent of it is presently unknown ( similar problem in OECD member countries (SME Financing Gap Study, OECD, 2006). To date, there have been a dearth of cross-country comparisons of specific financing limitations, thereby stymieing any possible regulatory change or action by the financial community. Under the mandate from its EFN, the MENA-OECD Investment Programme would like to reconcile this shortcoming by conducting a quantitative study on challenges facing entrepreneurs, and the role of private equity and other financing mechanisms in bridging a possible gap. Financing instruments to be considered: Debt instruments (bank loans, corporate debt issuance; long-term and short-term) Equity instruments (private equity, venture capital) Factoring/Leasing Export credits Guarantee funds Micro-credit Government instruments The study is envisioned to cover the Gulf GCC countries (Kuwait, Qatar, Saudi Arabia, UAE, Bahrain, Oman), Jordan, as well as 2 North African countries (Egypt and Morocco). The study is envisioned to be carried out throughout the period of approximately 3-5 months, with the assistance of the regional networks of the Programme, consultants from the individual countries, where necessary, and feedback from the Enterprise Financing Network. The study would be based on quantitative and qualitative analysis of the potential financing gaps in the six mentioned countries. Research efforts will concentrate in surveying existing venture capital companies, technology parks, incubators, entrepreneurial associations, universities, chambers of commerce, relevant state authorities as well as certain financial sector institutions. The study would be aimed to reveal the gaps, if any, in enterprise financing at the various stages (angel, seed, startup, early stage, pre-venture capital), considering the sectoral orientation trends of the new start up companies and the financial resources made available to them by existing financing institutions. Furthermore, any obstacles in the regulatory environment in relation to creation of start up financing mechanisms and in general conditions for entrepreneurship wil be highlighted.
  • While the financing gap is widely acknowledged to exist in the MENA region, and is perceived to constitute a significant obstacle to enterprise development and innovation in the MENA region, the extent of it is presently unknown ( similar problem in OECD member countries (SME Financing Gap Study, OECD, 2006). To date, there have been a dearth of cross-country comparisons of specific financing limitations, thereby stymieing any possible regulatory change or action by the financial community. Under the mandate from its EFN, the MENA-OECD Investment Programme would like to reconcile this shortcoming by conducting a quantitative study on challenges facing entrepreneurs, and the role of private equity and other financing mechanisms in bridging a possible gap. Financing instruments to be considered: Debt instruments (bank loans, corporate debt issuance; long-term and short-term) Equity instruments (private equity, venture capital) Factoring/Leasing Export credits Guarantee funds Micro-credit Government instruments The study is envisioned to cover the Gulf GCC countries (Kuwait, Qatar, Saudi Arabia, UAE, Bahrain, Oman), Jordan, as well as 2 North African countries (Egypt and Morocco). The study is envisioned to be carried out throughout the period of approximately 3-5 months, with the assistance of the regional networks of the Programme, consultants from the individual countries, where necessary, and feedback from the Enterprise Financing Network. The study would be based on quantitative and qualitative analysis of the potential financing gaps in the six mentioned countries. Research efforts will concentrate in surveying existing venture capital companies, technology parks, incubators, entrepreneurial associations, universities, chambers of commerce, relevant state authorities as well as certain financial sector institutions. The study would be aimed to reveal the gaps, if any, in enterprise financing at the various stages (angel, seed, startup, early stage, pre-venture capital), considering the sectoral orientation trends of the new start up companies and the financial resources made available to them by existing financing institutions. Furthermore, any obstacles in the regulatory environment in relation to creation of start up financing mechanisms and in general conditions for entrepreneurship wil be highlighted.
  • While the financing gap is widely acknowledged to exist in the MENA region, and is perceived to constitute a significant obstacle to enterprise development and innovation in the MENA region, the extent of it is presently unknown ( similar problem in OECD member countries (SME Financing Gap Study, OECD, 2006). To date, there have been a dearth of cross-country comparisons of specific financing limitations, thereby stymieing any possible regulatory change or action by the financial community. Under the mandate from its EFN, the MENA-OECD Investment Programme would like to reconcile this shortcoming by conducting a quantitative study on challenges facing entrepreneurs, and the role of private equity and other financing mechanisms in bridging a possible gap. Financing instruments to be considered: Debt instruments (bank loans, corporate debt issuance; long-term and short-term) Equity instruments (private equity, venture capital) Factoring/Leasing Export credits Guarantee funds Micro-credit Government instruments The study is envisioned to cover the Gulf GCC countries (Kuwait, Qatar, Saudi Arabia, UAE, Bahrain, Oman), Jordan, as well as 2 North African countries (Egypt and Morocco). The study is envisioned to be carried out throughout the period of approximately 3-5 months, with the assistance of the regional networks of the Programme, consultants from the individual countries, where necessary, and feedback from the Enterprise Financing Network. The study would be based on quantitative and qualitative analysis of the potential financing gaps in the six mentioned countries. Research efforts will concentrate in surveying existing venture capital companies, technology parks, incubators, entrepreneurial associations, universities, chambers of commerce, relevant state authorities as well as certain financial sector institutions. The study would be aimed to reveal the gaps, if any, in enterprise financing at the various stages (angel, seed, startup, early stage, pre-venture capital), considering the sectoral orientation trends of the new start up companies and the financial resources made available to them by existing financing institutions. Furthermore, any obstacles in the regulatory environment in relation to creation of start up financing mechanisms and in general conditions for entrepreneurship wil be highlighted.
  • While the financing gap is widely acknowledged to exist in the MENA region, and is perceived to constitute a significant obstacle to enterprise development and innovation in the MENA region, the extent of it is presently unknown ( similar problem in OECD member countries (SME Financing Gap Study, OECD, 2006). To date, there have been a dearth of cross-country comparisons of specific financing limitations, thereby stymieing any possible regulatory change or action by the financial community. Under the mandate from its EFN, the MENA-OECD Investment Programme would like to reconcile this shortcoming by conducting a quantitative study on challenges facing entrepreneurs, and the role of private equity and other financing mechanisms in bridging a possible gap. Financing instruments to be considered: Debt instruments (bank loans, corporate debt issuance; long-term and short-term) Equity instruments (private equity, venture capital) Factoring/Leasing Export credits Guarantee funds Micro-credit Government instruments The study is envisioned to cover the Gulf GCC countries (Kuwait, Qatar, Saudi Arabia, UAE, Bahrain, Oman), Jordan, as well as 2 North African countries (Egypt and Morocco). The study is envisioned to be carried out throughout the period of approximately 3-5 months, with the assistance of the regional networks of the Programme, consultants from the individual countries, where necessary, and feedback from the Enterprise Financing Network. The study would be based on quantitative and qualitative analysis of the potential financing gaps in the six mentioned countries. Research efforts will concentrate in surveying existing venture capital companies, technology parks, incubators, entrepreneurial associations, universities, chambers of commerce, relevant state authorities as well as certain financial sector institutions. The study would be aimed to reveal the gaps, if any, in enterprise financing at the various stages (angel, seed, startup, early stage, pre-venture capital), considering the sectoral orientation trends of the new start up companies and the financial resources made available to them by existing financing institutions. Furthermore, any obstacles in the regulatory environment in relation to creation of start up financing mechanisms and in general conditions for entrepreneurship wil be highlighted.
  • While the financing gap is widely acknowledged to exist in the MENA region, and is perceived to constitute a significant obstacle to enterprise development and innovation in the MENA region, the extent of it is presently unknown ( similar problem in OECD member countries (SME Financing Gap Study, OECD, 2006). To date, there have been a dearth of cross-country comparisons of specific financing limitations, thereby stymieing any possible regulatory change or action by the financial community. Under the mandate from its EFN, the MENA-OECD Investment Programme would like to reconcile this shortcoming by conducting a quantitative study on challenges facing entrepreneurs, and the role of private equity and other financing mechanisms in bridging a possible gap. Financing instruments to be considered: Debt instruments (bank loans, corporate debt issuance; long-term and short-term) Equity instruments (private equity, venture capital) Factoring/Leasing Export credits Guarantee funds Micro-credit Government instruments The study is envisioned to cover the Gulf GCC countries (Kuwait, Qatar, Saudi Arabia, UAE, Bahrain, Oman), Jordan, as well as 2 North African countries (Egypt and Morocco). The study is envisioned to be carried out throughout the period of approximately 3-5 months, with the assistance of the regional networks of the Programme, consultants from the individual countries, where necessary, and feedback from the Enterprise Financing Network. The study would be based on quantitative and qualitative analysis of the potential financing gaps in the six mentioned countries. Research efforts will concentrate in surveying existing venture capital companies, technology parks, incubators, entrepreneurial associations, universities, chambers of commerce, relevant state authorities as well as certain financial sector institutions. The study would be aimed to reveal the gaps, if any, in enterprise financing at the various stages (angel, seed, startup, early stage, pre-venture capital), considering the sectoral orientation trends of the new start up companies and the financial resources made available to them by existing financing institutions. Furthermore, any obstacles in the regulatory environment in relation to creation of start up financing mechanisms and in general conditions for entrepreneurship wil be highlighted.
  • Transcript

    • 1. MENA-OECD Enterprise Financing Network “ Providing Linkages for Growth” Dr. Alexander Böhmer , Executive Programme Manager, MENA-OECD Investment Programme Tel: +33 1 45 24 1912 Fax: +33 1 44 30 6135 [email_address] www.oecd.org/mena/investment
    • 2. MENA-OECD Investment Programme
      • “ Mobilise private investment – foreign, regional and domestic – as driving force for economic growth and employment throughout the MENA region.”
      • The MENA-OECD Investment Programme is a regional effort, initiated and led by countries in the Middle East and North Africa (MENA).
      • It promotes broad reforms to enhance the investment climate and sustainable economic growth throughout the MENA region.
      • It facilitates policy dialogue and sharing of experience on investment policies among policy makers from MENA countries and their OECD counterparts.
    • 3. MENA-OECD Enterprise Financing Network
      • The MENA-OECD Enterprise Financing Network aims to improve the regulatory conditions for financing entrepreneurship using the MENA-OECD Investment Programme as a forum for exchange of good practice between MENA and OECD business and government representatives
      • The Network aims to foster entrepreneurship in the region by:
        • Creating a platform to connect entrepreneurs, financiers and government regulators
        • Providing avenues for private sector participants to effectively input into key investment policy reforms relevant to financing of entrepreneurship
    • 4. MENA-OECD Enterprise Financing Network
      • The Network is wide : 18 MENA countries and OECD member countries are supporting the MENA-OECD Investment Programme
      • The Network is deep : it provides a business and policy network for actors including:
        • Private Equity
        • Venture Capital
        • Business Angels
        • Associations
        • Business Incubators
        • Entrepreneurs
        • Government regulators (MENA and OECD countries)
        • Investment Promotion Agencies (MENA).
    • 5. Actions going forward
      • Continue enlarging the Enterprise Financing Network
      • Develop recommendations and action plans to address innovative technology and regulatory issues
      • Launch a report to determine the enterprise financing gap in the MENA region
      • Develop a blueprint for enterprise funds
      To support efforts of MENA entrepreneurs to effectively participate in development of their economies why?
    • 6. Ministerial Declaration, Jordan 14 February 2006
      • Sustaining efforts towards modernisation of financial systems to meet the challenge of employment creation and technological advance by
      • 1. “broadening the range of financial services and products that are available and aligning supervisory practices with global standards” ;
      • And by:
      • 2. “developing effective frameworks and policies for entrepreneurship, including the promotion of women’s entrepreneurship”.
    • 7. Existing Models to Close the Financing Gap
      • Selected Regional examples
      • Public guarantee instruments : introduced in Egypt, Israel, Jordan, Lebanon, Morocco and Tunisia in cooperation with their banking sectors
      • SME banks : Banque de Financement de Petites and Moyennes Enteprises (BFPME) created in 2005 in Tunisia to provide loans to local SMEs. Fondation Bank Populaire of Morocco and Bank of Cairo in Egypt began to outsource this customers segment set up microfinance departments within the bank.
      • Venture capital initiatives: In Morocco, a law regulating the venture capital sector was introduced in 2006 in order to provide incentives for funds to invest in SMEs
      • International initiatives
      • A number of regional initiatives established (EU Working Party on access to finance for SMEs, IFC-PEP MENA Programme, etc.) to address the issue
      • EIB co-investing via specialised local intermediaries, direct equity participations in local investment funds, or even in local companies.
      • Enterprise Financing Network which aims to close the financing gap by studying the exact demands for financing in each country and gather entrepreneurs and financiers
    • 8. Gap Study: Context and Content
      • Extent of the financing gap in the MENA region is unknown due to data limitations
      • EFN to undertake quantitative study on financing gap in MENA region
      • Financing instruments to be considered
      • Obstacles in the regulatory environment in relation to creation of start up financing mechanisms and in general conditions for entrepreneurship will be highlighted.
      • Outcome : quantification of gaps (stage, sector, etc.) per country
    • 9. Recommendations
      • General
      • Address the shared responsibility for public and private sectors and facilitate information exchange between government action and private sector initiatives on innovative entrepreneurship and enhancement of financing conditions;
      • Improve the collection and disseminate data related to enterprise financing through various instruments (bank credit, fixed income instruments, capital markets, venture capital, private equity, etc.);
      • Establish linkages between financiers, namely venture capital and private equity, business angels and science and technology associations, entrepreneurs, and other actors in the entrepreneurship value chain in order to bridge the financing gap;
    • 10. Recommendations
      • Governments
      • Provide support to governments in the MENA region wishing to develop instruments to bridge specific gaps to innovative enterprises, particularly in knowledge intensive industries;
      • Encourage governments to further develop capital markets in order to facilitate Initial Public Offerings and securities issuance;
      • Encourage governments to consider supporting SMEs with fiscal and non-fiscal incentive schemes, finance guarantee programmes, and equity participation and other financing instruments;
      • Encourage governments to further develop the fixed income instruments market in order to facilitate corporate borrowing;
    • 11. Recommendations
      • Recommend the establishment of private and public credit bureaus in order to establish credit history and thus facilitate borrowing;
      • Encourage governments to evaluate their insolvency frameworks in order to facilitate corporate borrowing as well as issuance of debt and equity instruments;
      • Review the legal framework with respect to innovation and financing, in particular takeover and joint venture legislation and regulation of intellectual property with a view to facilitate domestic and foreign investment in the financial industry;
    • 12. Recommendations
      • Private sector/incubators
      • Make efforts to increase the entrepreneurs’ awareness of financing tools available to them;
      • Provide training to entrepreneurs on how to formulate business plans and present their activities to potential financiers;
      • Develop a blueprint for successful enterprise funds drawing on best practice from MENA and OECD countries;
      • Consider the specific difficulties in obtaining financing which may be faced by women entrepreneurs in the MENA region;
      • Support the establishment and use of business incubators in order to assist the commercialisation of early-stage enterprises;
      • Foster linkages between universities, R&D centers, science and technology parks, business incubators and entrepreneurs.
    • 13. Recommendations
      • Enterprise Financing Network
      • Support analysis undertaking by the MENA-OECD Enterprise Financing Network on how to address the financing gap/innovation challenges in the MENA region;
      • Survey framework conditions relating to the operation of private equity and venture capital in the MENA countries and develop recommendations;
      • Participate and support the Enterprise Financing Network as a key initiative to reduce the financing gap in the Middle East and North Africa region.
      • Encourage the establishment of a regional institute for entrepreneurial finance to conduct research, education and professional training and provide advice on the regulatory environment and the development of financing instruments
    • 14. Network Access
      • If you are interested in learning more about the MENA-OECD Enterprise Financing Network, please contact
      • [email_address] .

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