When a customer confronted Tamer Ahmed, claiming that the truck tyres he had sold him were fake, Mr Ahmed had a brainwave.
That was three years ago in Egypt, where Mr Ahmad ran a general trading company dealing in tyres. He went on to co-found Asly, which in Arabic means “genuine”, moving the business to Dubai four months ago, when it was accepted into DP World’s Turn8 incubator.
The start-up provides a code that is stamped on products at the manufacturing stage. The customer can then check the code with Asly to see if it is genuine. Asly works with seven brands, including Bridgestone Corporation in Egypt and will enter the UAE with Al Islami Foods and Nestlé.
Some US$70,000 has already been invested in Asly, and it is looking for $700,000 more to scale it up to Saudi Arabia and Kuwait.
It is one of the 10 shortlisted enterprises to pitch at a competition as part of the first SME Congress and Expo in Abu Dhabi, a three-day event which began yesterday.
The winning prize in the competition includes a management training course worth US$5,000 and two business class flights from Etihad Airways.
“This is a good way to network, we need more investment and more exposure, and we need to build relations with brands and customers,” said Mr Ahmed.
“Here in the UAE there are more opportunities in terms of market expansion and funds; in Egypt it’s tough to get funds,” he said. “But in the whole region there is no ecosystem of angle investors and other funding support for [small to medium enterprises] and no bankruptcy laws; that is a challenge.”
A need to improve funding and policy support was a big theme of the first day of the congress.
The average share of SME lending on total bank loans is eight per cent in the Mena region, according to a World Bank report released last year. In the Arabian Gulf, the figure drops to 2 per cent. Outside the Gulf, the share of loans to SMEs is 13 per cent.
Mehirr Nath Choppra, a co-founder of the radio service Audio Republic, and another competition entrant, hopes to raise $1 million to fund the business.
“I like competitions for investment where even if I don’t win, there could be someone in the audience who might like Audio Republic and would want to invest,” Mr Choppra said.
In UAE, the share of bank lending to SMEs is 4 per cent, compared to 24 per cent in Morocco, said Mahdi Kilani, executive vice president and head of business banking division at Abu Dhabi Islamic Bank, referring to a World Bank report.
“So, there is a large room to improve and SMEs are underserved,” he said. “[A] few banks are servicing SMEs under the local corporate segment, while others treat them as retail.”
Things have improved, he said, with more banks in the UAE servicing the sector. “We have 40 banks working in the SME finance space in the UAE, and at least 12 banks have a focused offering for SMEs,” Mr Kilani said. Adib started its SME programme in 2009.
There are about 300,000 SMEs in the UAE, accounting for 92 per cent of businesses in the country and employing 86 per cent of the workforce in the private sector, according to the Ministry of Economy.
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