FINANCE STRATEGY

FINANCE STRATEGY

Small and medium-sized enterprises (SMEs) are the key to long-lasting growth and development in economies throughout the world. Through the creation of sustainable, community-based jobs, SMEs represent an incredible economic engine that can power substantial growth and generate significant societal benefits through increased productivity, employment, and stability. In the Middle East and North Africa (MENA)—similar to other markets throughout the globe—SMEs have limited options for accessing capital. Commercial banks and other traditional lenders typically tend to view investments in small enterprises as risky propositions, preferring to prioritize corporate loans, retail banking, and government bonds.

The Middle East Investment Initiative (MEII) was born out of a desire to de-risk financing for SMEs in the MENA region by providing partial loan-guarantees to banks and other financing institutions. However, the challenge is far greater than simply perceived risk. Banks in the MENA region consistently report that the poor quality of loan applications hinders their efforts to provide greater financing for SMEs. This weakness perpetuates risk aversion in the credit market, resulting in prohibitive collateral requirements and preventing entrepreneurs from accessing the necessary credit needed to launch their enterprises or expand their existing operations. Breaking this cycle requires a unique approach that addresses both the lack of financing and supports capacity building for SMEs.

Tamweeli—which can be translated as “Finance Me” or “My Finances” in Arabic—serves as a multifaceted response to the dual challenges of access to finance and capacity building for SMEs throughout the MENA region.