(MENAFN- Kuwait News Agency (KUNA)) Small and medium enterprises have been promoted globally and in the Arab world as a solution to absorb the huge numbers of unemployed youth, many of whom were the motivating force for the "Arab spring" disturbances.
SMEs constitute 90 percent of registered enterprises in the Arab world, including Kuwait and Oman. However, the proportion reaches 95 percent in Saudi Arabia and 99.1 percent in Egypt's non-agricultural field, according to a study released of the Arab Planning Institute.
Also by comparison, the SMEs constitute 77 percent of the domestic product in Algeria, 59 percent in Palestine and 25 percent in Saudi Arabia. Seventy-four percent of the employments are in the SMEs in Egypt, 50 percent in Jordan and 72.3 percent in Bahrain.
Number of enterprise facilities in the Arab world, in 2010, reached 10 million, according to the study.
Kuwait was among the first countries that became aware of the necessity of the SMEs. His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah announced, in January 2009 during the first economic development summit, hosted by the country, establishing a fund for supporting SMEs at the Arab level, with a Kuwaiti contribution amounting to USD 500 million.
At the domestic level, Kuwait established the National Fund for Small and Medium Enterprises, according to Law 98/2013, with KD one billion capital. Several others had been set up for the same purposes, however, some of them were short lived.
The national fund provides financial support and facilities for the investors, according to certain terms; such as the entrepreneur must be a Kuwaiti citizen, aged no less than 21 years, with a clean record, that he (or she) be fully devoted for the enterprise, that the cost of launching the enterprise does not exceed KD 500,000 - according to the feasibility study and the work plan and without calculating value of the land plot on which the business is launched.
The fund aims to realize higher added value, boost the national economy, diversify income resources, create jobs for Kuwaitis, in addition to setting up incubators for encouraging the zero-experience entrepreneurs; that is in line with the approach to diversify the national economy.
In the small enterprise, staff should not exceed four Kuwaitis, with a capital not higher than KD 250,000. As to the medium business, number of the Kuwaiti workers ranges between five and 50, with the capital between KD 250,000 and KD 500,000.
There are other criteria, adopted by other nations, for classifying the SME, such as volume of financial proceeds and proportion of its contributions to the domestic product. (end) fnk.abd.rk
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