Case study of bedaya centre for entrepreneurship & sm es development,mahi al jazzar project coordinator
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  • Mentorship Program Currently developing a new model for mentorship, through recruiting a network of mentors from the business community and selecting committed entrepreneurs or start-ups projects. The program aims to: Facilitate the relationship and business linkages between mentors and mentees. Ensure the collaboration between mentors and mentees to satisfy the need for more market-focused entrepreneurs
  • Definition: Any economic activity that is neither taxed nor monitored by the government or included in the calculation of the GDP. Key drivers for growth: Avoiding government control and bureaucracy Tax Evasion. Using government utilities at a lower rates compared to commercial/industrial rates Easier access and exit from the market. No quality, environmental, health, patents, copy rights and other forms of control Working in residential areas proximate to their respective markets Challenges facing informal economic units: Different forms corruption and lack of transparency Fines continuously levied due to lack of proper licensing Unable to export or access big markets such as government procurements and multinational corporations Difficulty to attract skilled labor who would prefer formal sector with proper social insurance Lack of access to finance through financial institutions
  • Government stakeholders Cairo and Qalyoubeya governorates Industrial Development Authority Environmental Affairs Agency Tax Authority Spirit of Youth Association and a Group of workshops specialized mainly in paper and plastic recycling Capacity Building: Providing financial and non-financial consultancy services to assist them in obtaining required financing. Organizing workshops focusing on vital areas such as financial management, book-keeping, tax filing, marketing plans and human resources management. Access to Finance: Facilitate obtaining finance through: Financial institutions and the SFD through assisting them in preparing the relevant documents and business plans. Private Equity Fund “Bedaya I” Awareness Campaigns, trough: Website of Bedaya Center Workshops and seminars in various governorates Talk-Shows and interviews Hot-line for receiving inquiries and complaints.

Transcript

  • 1. 1Mahi Al-Jazzar - June 21st , 2013 Case Study of Bedaya Centre forCase Study of Bedaya Centre for Entrepreneurship & SMEsEntrepreneurship & SMEs DevelopmentDevelopment
  • 2. 2 ContentContent
  • 3. I-Bedaya Centre Profile 3  Establishment: – Bedaya Centre for Entrepreneurship and SMEs Development was established in January 2010 according to GAFI Board statement, in order to implement the strategy of supporting and developing small & medium investments  Mission: – To support the growth and development of the SMEs in Egypt; in line with the National strategy toward raising the economic development indicators.
  • 4. Key Pillars 4 Improve Business ClimateImprove Business Climate Perfect Place for SMEs Business Developme nt Services Informal To Formal Entreprene urship programs Access to Finance
  • 5. 5 II-Business Development Services Business Clinics Program  Providing free-of-charge consultations from professional volunteer consultants in various business disciplines including but not limited to: Legal Financial HR Planning Management Marketing Business Improvement IT  Consultations are provided through one-to-one meetings between the SME and the consultant or through workshops.  Until May 2013, Bedaya has provided 552 consultations to entrepreneurs and SMEs
  • 6. 6 III- Access to Finance Financing gap: SMEs sector accounts for 80% of the active economic units in Egypt; however, can access only 10% of the available finance from banks. 1.Conventional Financing: •Referrals to banks •Credit Guarantee Company Only 5 SMEs have got the required funding out of total Number of 43 files that were submitted through Bedaya Centre 2.Non- Conventional Financing: •“Bedaya 1” Private Equity Fund
  • 7. 7 III- Access to Finance Bedaya Private Equity Fund  Established according to the provisions of the Capital Market Law no. 95/1992  Main objective is to provide  -SMART CAPITAL- and know-how support required to promote the growth of the Egyptian SMEs  “Bedaya 1” fund has been launched in 18th February 2013; licensed with total size of EGP 134 Million and fixed term of 10 years.  It invests in companies registered under the provision of Egyptian laws, with capital not less than EGP 2m and do not exceed EGP 50m  “Bedaya 1” fund is managed by Al-Ahly for Development & Investment (ADI) one of the most competent and experienced local fund managers in Egypt  “Bedaya 1” invests in all sectors except in Tobacco, Alcohol, gambling, import and real estate  Investment policy considers sectors and geographic diversification, with majority of the fund portfolio dedicated to investments outside Greater Cairo (60%)  10% of the fund portfolio is VC, with special focus on innovative start-ups  “Bedaya1” has already invested in 3 companies; another 3 companies are about to sign the terms sheets shortly and other 8 projects are currently in the
  • 8. 8 IV- Entrepreneurship Bedaya Center designed its entrepreneurship program to promote the entrepreneurial culture among youth and transfer their mindset from job seekers to job creators. Meanwhile, acting as a catalyst, building and integrating with other entrepreneurship initiatives and programs.
  • 9. 9 V- Informal Sector  Studies have shown that: – Number of the informal economic units in Egypt was estimated by around 1.5 million in 2010 (MBDI – EIB 2010) – Informal employment was estimated at 8 million workers excluding agricultural activities according to ILO statistics in 2009.
  • 10. V- Informal Sector Pilot Project 10  GAFI Bedaya launched an initiative to formalize the informal units in cooperation with key government stakeholder  Two key areas were selected for the pilot project namely “Masheyet Nasser and Ezbet El Nakhl” • The high volume of working entities estimated at around 4,300 in both areas with an annual turn- over rate ranging from EGP 1 – 2 million each  A working group was formed under the leadership of GAFI and Bedaya Centre and including several governmental stakeholders.  Key outcomes: • 70 economic units were formalized • Tax law is being reviewed to exempt formalized units from the previous tax due • Streamlining government procedures (Registration, Licensing, land allocation …)
  • 11. VI- Underway Efforts to Commercialize R&D 11  MoU has been signed between “Bedaya 1” investment Fund and the Academy for Scientific Research & Technology ASRT to: 1. Cooperate in supporting innovative and technology-based entrepreneurs and SMEs 2. Establish an intermediary corporation similar to the Malaysian model “MTDC”, which provides funds, mentoring and incubation; in addition to other value added services for technological and scientific research in order to travel to the market  The Company’s objectives revolve around: • Facilitating patency and IPR registrations for scientific & technological researches, • Guiding entrepreneurs through all the technical support and consultations required for their businesses • Selecting the best qualified entrepreneurs to run and manage new ventures based on the transformation of scientific researches into market applicable products and services • Facilitating licensing of universities techno-researches through various means such as alliances, joint ventures or through new ventures
  • 12. 12 VII- Challenges & Key Policy Priorities
  • 13. 13 Challenges  Ecosystem Challenges: • No unified definition for SMEs in Egypt • Lack of a champion responsible for SMEs • Lack of information on number of SMEs and their contribution to GDP • Weakness of the legislative environment especially the bankruptcy law  SMEs Challenges • Access to equipped, feasible priced lands • Licensing (no central mechanism, high cost for hiring legal representative) • Weak competitive advantage in front of larger businesses • Access to Finance • Access to BDS (on both levels, the supply and the demand)
  • 14. 14 Challenges  Bedaya Centre Challenges • Sustainability of the provided BDS (mainly depending on volunteers consultants) • Entrepreneurship support efforts are scattered and not embedded officially in the national economic agenda  Commercializing R&D Challenges • Complete separation between academia and industry (an innovation study on Egypt has shown that less than 6% of companies go to universities when they face problems) • Earning the trust of researchers is a challenge, as they may not believe in the possibility of real commercialization and may be skeptical in working with business. • Academia is not oriented towards commercialization, as commercialization does not go in the promotion process along with publication. Therefore, its not applicable to have applied research and clear IP strategy • Financing early start-ups is very challenging • No formal networking between the academia and the private sector; also between entrepreneurs and potential investors (no mechanism of finding the right match) • Lack of ability to assess the feasibility of the idea traveling to market
  • 15. 15 Policy Priorities  General Policies • National Strategy for the development of SMEs and Entrepreneurship that would advocate Bedaya Centre as the champion in this concern • Creating the link between BDS and access to finance in a structured mechanism • Drafting a law for SMEs with a set of incentives, which some efforts are currently underway.  Commercializing R&D Policies • Government to interfere in early financing for entrepreneurs, especially that private sector is skeptic in this phase • Develop an incentive scheme for companies spending on R&D • R&D financing policy, with an eye on commercialization • IP policies and its enforceability • Establish and properly structure university incubators where R&D could be commercialized
  • 16. 16 Thank You