Bahrain targets 35% SME contribution to GDP by 2018

Small and medium enterprises have become important revenue drivers and job creators for the kingdom, a government official said.

03 August 2015
Bahrain plans to increase small and medium enterprises' (SMEs) contribution to national economy through Bahrain Economic Vision 2030, Abdel Kareem Al Rashid, undersecretary of the kingdom's Ministry of Industry and Commerce (MOIC), told Zawya-TR.

He explained that the government endeavors to raise the SME sector's GDP contribution to 35% in the next three years, from the current 30%. Small and medium businesses have also been important job creators, accounting for 37% of the private sector's employment opportunities.

The government has succeeded in reducing monthly unemployment rate from 3.8% in December 2014 to 3.5% in March 2015, according to minister of labor Jameel Bin Mohammed Ali Humaidan; while first quarter jobless figures were stable at 3.7%, the same as in the fourth quarter of 2014.   

Investments in Bahraini SMEs also grew by almost 55% to BHD 49 million (USD 130 million) in the first half of 2015, compared with BHD 31.7 million (USD 84.1 million) in the same period a year before, according to Bahrain Development Bank (BDB).

"There is a system in place in Bahrain to support the growth of SMEs, such as the employment fund Tamkeen, BDB, Bahrain Chamber of Commerce and Industry, in addition to agencies providing SMEs with development, funding, consulting and training programs," Al Rashid said.







Percentage of enterprises






Number of enterprises






Source: Labour Market Regulatory Authority (LMRA)


Back in February 2010, Bahrain launched Ebdaa Microfinance Bank, the first financial institution to provide micro financing assistance in the Arabian Gulf region. The initiative has empowered the less fortunate segments of society by helping them improve their living conditions through entrepreneurship supported by a financial package, as well as consultancy services.

Currently, Bahrain Development Bank (BDB) is the principal source of funding for SMEs in Bahrain. The bank's funding portfolio for all financing programs reached BHD 38.5 million (USD 102.1 million) in the first half of 2015, a 23% increase from the BHD 31.2 million (USD 83 million) recorded in H1 2014.

"The bank estimates profits of SMEs in the next few years to stand at BHD 11.5 million [USD 30.5 million], while job opportunities arising from this sector are expected to reach 998," the labor undersecretary said.

Al Rashid added that the program is available only to Bahraini enterprises established in the kingdom, as a way to encourage citizens to explore entrepreneurial activities and help reduce unemployment figures.

The ministry official clarified that while the MOIC actively supports efforts to advance the SME sector, it does not provide financial support to small and medium businesses. It is, however, implementing an industrial handling and partnership program, which acts as a link between SMEs and big companies in Bahrain. The program aims at creating opportunities for SMEs, by encouraging large companies to source the products and services, which they usually import, locally.

He added that the ministry also has an industrial technical support program, where a specialized team of technical experts conduct field visits to small- and medium-sized factories, providing comprehensive technical assessment of their equipment.

© Zawya 2015

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