Government rejects new SME Fund proposal

TDT | Manama                                                      

The Daily Tribune – www.newsofbahrain.com

Email: mail@newsobahrain.com

A proposal to create a new fund for small and medium-sized enterprises (SMEs) as a replacement for Tamkeen, the Labour Fund, has been rejected by the government.

In its defense, the government asserted that Tamkeen already effectively meets the goals of the proposed fund.

In a memorandum addressing the parliamentary bill, the government emphasized that establishing a duplicate entity would be redundant and inefficient, given Tamkeen’s established infrastructure and successful track record.

A government statement highlighted Tamkeen’s significant contributions to the SME sector, noting that approximately 96% of its total support has been allocated to micro, small, and medium-sized businesses since its inception, with only 4% directed towards larger companies.

The government cited successful initiatives such as the “Career Development Programme” and the “Business Growth Programme” as evidence of Tamkeen’s positive impact on SME development.

Additionally, the government reaffirmed its commitment to supporting SMEs through various initiatives, including incentive programs for promising sectors and the launch of the 2022-2026 Financial Services Development Strategy.

This strategy aims for a 20% increase in SME access to available financing, ultimately boosting their growth and contribution to the national economy.

The government also pointed out the Central Bank of Bahrain’s directive to retail banks to review and expand their SME financing targets.

This includes establishing dedicated departments within credit divisions to manage SME financing and developing tailored financial products.

Notably, the government reported a significant increase in SME financing by banks, rising to 10.5% last year, compared to 4.8% in 2022—an impressive growth of over 50% in just one year.

This progress underscores the effectiveness of current strategies and highlights the unnecessary duplication that a new fund would entail.