The government of Bahrain, in response to a parliamentary proposal to establish a new fund for SMEs, has defended the role of Tamkeen, the Labour Fund, in supporting the growth of the national economy and the private sector. Tamkeen has been highlighted for its significant contribution to the SME sector, with 96% of its total support allocated to micro, small, and medium-sized businesses. The government cited successful programmes like the “Career Development Programme” and the “Business Growth Programme” as examples of Tamkeen’s positive impact on SME development.
In a memorandum addressing the parliamentary bill, the government argued that creating a duplicate entity for SME financing would be unnecessary and inefficient given Tamkeen’s existing infrastructure and proven track record. The government reiterated its commitment to supporting SMEs through various initiatives, including incentivising programmes in promising sectors and the launch of the 2022-2026 Financial Services Development Strategy. This strategy aims to increase SME access to available financing by 20% to boost their businesses and contribution to the national economy.
The government also highlighted the Central Bank of Bahrain’s directive to retail banks to review and expand their SME financing targets. This includes establishing dedicated departments or units within credit departments to handle SME financing and developing financial products tailored to SME needs. The government pointed to positive progress, with SME financing by banks increasing to 10.5% last year, compared to 4.8% in 2022—a significant increase of over 50% in a single year. This demonstrates the effectiveness of current strategies and the unnecessary duplication of effort that a new fund would represent.
Overall, the government’s response emphasizes the importance of Tamkeen in supporting the growth of the national economy and the private sector. With its focus on supporting SMEs through various initiatives and programmes, Tamkeen has been instrumental in the development and growth of micro, small, and medium-sized businesses in Bahrain. The government’s commitment to enhancing SME access to financing and implementing tailored financial products further reinforces its dedication to supporting the SME sector and driving economic growth in the country.
As Bahrain continues to prioritize the growth and development of its SME sector, the government’s emphasis on the effectiveness of current strategies and the progress made in SME financing by banks showcases a positive outlook for the future. By leveraging existing infrastructure and focusing on targeted initiatives, Bahrain aims to further boost the contribution of SMEs to the national economy and create a conducive environment for their growth and success. The government’s defense of Tamkeen’s role and its commitment to supporting SMEs signal a promising future for small and medium-sized businesses in Bahrain.
