Middle eastern platform publishes research highlighting the drivers behind SME growth
Dubai-based P2P platform Beehive has celebrated its first anniversary with striking results, including almost AED 25 million channelled to 48 SMEs, zero defaults and over 2600 investors registered on the platform.
Launched in November 2014, Beehive has rapidly grown into one of the fastest growing UAE’s online peer-to-peer platforms, offering flexible Sharia compliant financing solutions – or in other words, socially responsible investments. People can invest from as little as AED 100 into each business listed on the platform and receive monthly repayments at target rates ranging between 8% APR and 20% APR. Beehive seems to support Dubai’s overall strategy to become the capital of the global Islamic Economy by 2016 and in the fulfilment of this objective, the platform was awarded 'Start-Up of the Year' at the Gulf Capital SME Awards, last October.
As a celebration for its first anniversary, the platform has also launched a special report, in partnership with Thomson Reuters, highlighting the links between SME innovation and finance. The paper is called “Spotlight on SME innovation” and it presents the views of over 100 SMEs in the UAE. To download the paper use this link.
Like many other studies in this space, the report finds that the funding of innovations a big barrier and 51% of SMEs’ owners consider finance as a major enabler to innovation. Among the UAE’s SME community, building a culture of innovation remains extremely difficult. Moreover, the majority of innovation in the UAE appears to come from the enhancement of existing ideas, without the need to “reinvent the wheel”.
Craig Moore, Founder and CEO of Beehive, commented:
“Being an SME ourselves, we know that our success is because of our ability to innovate. It is particularly important for SMEs to explore different ways to innovate so they can compete in both a regional and global market. We are delighted to be celebrating our first anniversary and have been overwhelmed with the response in the market and our ability to make a positive difference in the SME ecosystem in the UAE.”
The whitepaper also reports that the government plays a crucial role in encouraging SME innovation with the introduction of Free-Zone business hubs and business-friendly regulations.
The bottom line of this research is that innovation is thriving in the UAE’s SME community, which is an essential part of UAE’s economic system. Indeed, according to the Ministry of Finance, last year SMEs accounted for some 92% of all the businesses, contributed around 60% to the UAE’s GDP and provided 86% of all private sector employment.
Platforms like Beehive are the clear evidence that alternative finance is becoming a truly global phenomenon, spreading not only in the Anglophone countries – UK, US and Australia – but also in other unconventional parts of the world, such as United Arab Emirates. At the moment, Beehive seems to be the only platform in that area, but competitors will probably enter its market soon. We’ll surely keep a keen eye trained on the UAE’s space.