The beneficiary enterprises represent a broad cross-section of sectors and industries within Bahrain, with the majority coming from the trading, services, restaurants and coffee shops, foods and packaging, and education, respectively. About a third of the beneficiaries were businesswomen.
The Finance Scheme offers Shariah compliant financing solutions to startups in Bahrain at an affordable cost. Tamkeen subsidises 50% of the annual profit rate on the reducing balance.
Further, it is notable that BDB is amongst a handful of lending institutions in the country that actively finances startups that partnered with Tamkeen to bridge the finance gap. According to an Impact Assessment Study conducted by leading advisory firm, Dun and Bradstreet, the criticality of low-cost funding for start-ups is high in a scenario where start-ups find it extremely difficult to avail financing from regular commercial banks for setting up their business operations. Because of potential risks, banks usually refrain from offering loans to start-ups.
According to the study, within the sample of Greenfield cases evaluated as part of the sample; over 70% of such cases were found to have had a direct positive impact from the funding they received. Impact was deemed positive if the business successfully broke even in first two years of operation or if the facility successfully assisted the beneficiary in setting up a viable business model. Further, the study indicated that on an average start-ups funded under the scheme were able to generate a value of 1.4 times, the actual loan amount they received.
The finance amount ranges from BD 5,000 to BD 500,000 with an option of a long repayment tenor of up to 10 years and a grace period of one month to 2 years as per the partner bank’s discretion. This enables the start-up to commence operations and establish a customer base before starting the repayment process. In addition, the scheme offers a guarantee of 50% of the principal amount to the Partner Banks to encourage these banks to accept more applications from startups with potential for success and growth.
“We are extremely satisfied here in Tamkeen with the level of response received from Bahraini entrepreneurs wanting to develop their businesses and put them on a fast track toward a more prosperous future. This 1000 beneficiaries’ milestone is a testament of the effectiveness of this leading scheme in meeting with the needs of the private sector and are making an important contribution to economic prosperity,” Tamkeen’s Chief Executive Mahmood Hashem Al-Kooheji, said.
“Our strong, serious, and strategic partnership with Tamkeen seeks to design customised administrative and financing solutions that can help the youth manage successful enterprises capable of adapting to market requirements and achieving sustainability. SME’s now constitute the backbone of the national economy in many countries, creating more and more job opportunities. Although our joint programme managed to reach more than 1,000 beneficiaries, we seek to attract more young entrepreneurs with vision, creative thinking, and technical and interactive skills because we desperately need a new culture of free business and self-reliance,” BDB Chief Executive Officer Nedal Saleh Al Aujan, said.
This is the first factory for producing environment-friendly building materials composed of carbon fiber, fiberglass, thermal plastics, and other petroleum byproducts. All these raw materials are abundantly available in the GCC region. Owned by two outstanding Bahraini entrepreneurs, this project benefited from the joint Tamkeen-BDB Feasibility Study Support Scheme.
“The low-interest facility I obtained from Tamkeen and Bahrain Development Bank played a key role in bringing the idea of the project to life. I got financial support to conduct a feasibility study as well as consultation on the project, These, I believe, are the two most important initial requirements to accomplish any successful project and draw up realistic and proper plans,” Najat Saleh Taradah and Ahmed Yousif Al Sharaf – Tails Project, said.
“Tails is a new, innovative project established by two Bahraini entrepreneurs who benefited from the Pre-Seed Capital Support Scheme, offered in collaboration between Tamkeen and the BDB. The scheme offers grants to turn creative business ideas into real projects,” the statement, added.
“We benefited from the Pre-Seed Capital Support Scheme to test and then use a wide variety of fresh ingredients for our products. We then managed to develop the packaging process to prolong the life of the products. We also obtained finance from the bank at a competitive rate and secured a place in the bank’s business incubator center,” Najat added.
“The Mobile Spa is the first mobile beauty services in Bahrain. It offers services to customers in their homes, and it caters for special functions, corporate events, and different occasions. It offers massage, cleaning, manicure, wax and other services. It also offers fast equipment delivery services to homes and provides best quality, disposable health supplementary products and sterilisation of instruments used in these services,” Dina Al Ansari and Suha Sawan Mobile Spa, in a joint statement said.
“The finance and advisory support from Tamkeen and BDB helped us achieve our objectives. Yet I would like to stress that entrepreneurs also need to have strong wills, creative ideas, and willingness to work hard so that they can fulfill their ambitions,” Dina Al Ansari said.