The Khalifa Fund has a new message for entrepreneurs seeking its help: we supply the ideas.
Since its inception three years ago, eager entrepreneurs have been applying to the Khalifa Fund to finance their own business ideas.
But Dr Ahmed Khalil al Mutawa, the chief executive of the fund, said yesterday the foundation would launch a scheme where it posted job vacancies looking for entrepreneurs to establish small businesses for set industrial projects.
Budding industrialists will head up 10 projects that Dr al Mutawa believes will become success stories for the UAE. They will be interviewed, given the business idea and provided with finance to achieve it.
The Khalifa Fund will display the projects at the first Industrial Investment Opportunities Forum tomorrow in Abu Dhabi.
The foundation will also announce details on 30 to 40 "teaser" projects that could also receive financing, Dr al Mutawa said.
The push towards manufacturing comes after the fund launched Tasnea, an industrial financing scheme, last year.
The Khalifa Fund extended 60 loans last year. By the end of the year, it had provided loans to 240 projects, with a total value of Dh415 million (US$112.9m). But the Tasnea scheme financed only two projects.
Dr al Mutawa said the fund was trying to play a "proactive role" by attracting entrepreneurs in the industrial and manufacturing sector.
He said the economic development of the UAE had been dominated by the financial and property sectors because of the bigger profits.
"There was the psychology of fast profit," Dr al Mutawa said. "But when it comes to manufacturing and industry it requires a longer time, and more talents from the employees to be a success.
"You have to explore more markets outside the UAE, so people naturally feel reluctant. Entrepreneurs believe it won't be as rewarding as other sectors in the long term, so we are trying to play a proactive role to change that."
The opportunities for small businesses are "immense" in the industrial sector, Dr al Mutawa said, with companies such as Abu Dhabi Basic Industries Corporation, Emirates Steel and Borouge providing small businesses with a competitive advantage.
"All of these can give small companies a competitive advantage because the entrepreneurs will be close to the source," he said. "We're trying to capitalise on this fact."
The fund's loan financing cap is set at Dh10m but Dr al Mutawa will encourage entrepreneurs to also invest their own equity in the new projects.
The Khalifa Fund expects participants in the 10 new projects to add 20 per cent of the financing agreement.
If this is not possible but the fund interviews an excellent candidate, it may agree to an equity stake from the entrepreneur of 10 per cent.