Female entrepreneurs in the UAE require more mentorship programmes and greater support to better succeed in their ventures, according to businesswomen in the country.
Mona Tavassoli, founder and director of Mom Souq, an online bazaar for parents and Mompreneurs Middle East, a B2B platform for female entrepreneurs to share their experiences, emphasised the importance of training female entrepreneurs.
“I believe there should be more workshops and events for female entrepreneurs to train them in different areas such as risk taking, time-management, and to boost their confidence,” she said.
Shabana Karim, founder and owner of The Nail Spa, who also mentors young women about setting up a business, agreed that the UAE should offer more support programmes for young female entrepreneurs.
“Structured programmes that support and mentor existing or budding female entrepreneurs in start ups would greatly encourage and help develop themselves,” she said.
A recent study by Tahseen Consulting revealed that female entrepreneurs face gender specific barriers that reduce their ability to start a business and own businesses that thrive beyond the start-up stage.
There are a number of business networks in the GCC, which provide training and support for female start-ups in the region. But the majority of them are still new and face many funding challenges, the study said.
Despite such hindrances, the UAE has seen a rise in the number of businesswomen embarking on new ventures.
According to the Global Entrepreneurship Monitor (GEM) study that assesses entrepreneurial activity in countries, the rate of women in the UAE who are established business owners rose from an extreme low of 0.1 per cent in 2006 to a moderate rate of 1.4 per cent in 2011.
Funding- A Major Challenge
Though the majority of women entrepreneurs use their savings to fund their businesses, finding finance remains a major concern.
“In order to grow we had to invest all of our savings into the business and approach banks to help us secure further funding,” said Karim.
“Back then it was not easy for a small company to secure funding, but luckily they believed in our business model as much as we did!”
Unfortunately, women make a less appealing choice to traditional investors in the Middle East, opine experts.
According to a Booz&Co white paper on women entrepreneurship in the MENA, women in this region have limited financial literacy, insufficient collateral, inexperience in approaching financial institutions with bankable project proposals, and poor investment management skills.
Women also face an informal barrier to financing owing to the type of businesses they launch. According to the report, women often focus on lifestyle service sectors, whereas the growing number of incubators and accelerators in the region concentrate primarily on technology startups.
“Venture capitalists tend to be less interested [in such businesses] because they focus on high multiple returns and a clear exit strategy. Neither of these sine qua non requirements typically works well with lifestyle businesses,” said Heather Henyon, managing partner at Balthazar Capital, in the Booz&Co report.
She said that women-led startups need more “smart capital,” which typically comes from angel investors (wealthy private individuals) and networks willing to invest both capital and knowledge in women-led companies.
Women embarking on a business venture also need financial platforms that are more in tune with their requirements and typically backed by investors who are able to provide knowledge, mentoring, coaching, and support for women entrepreneurs.
However the various funding options available in the UAE aid women entrepreneurs to an extent, according to the businesswomen.
“Companies like ‘Eureeca’ make it much easier to launch your business and are helping people across the UAE to achieve their dreams by raising awareness about their businesses and helping to raise funds via crowd funding,” said Zeina Abdalla, the founder of Fishyface Studios.
Tavassoli said that there are also some funds that specifically target businesses run by women.
With the UAE looking to diversify its economy and improve its local unemployment rate, women entrepreneurs can play a major role in boosting the private sector.
Industry reports clearly indicate that by removing the explicit barriers that obstruct the growth of the region’s female entrepreneurs, the UAE government will fast track its effective transition to a sustainable economy.