(MENAFN - Khaleej Times) Majied Qasem, a Jordanian entrepreneur, waited three years to arrange outside funding for his start-up company, an Arabic social media and content-sharing platform.
He finally, and successfully, took the plunge last September, eight months after the Arab Spring uprisings erupted in the region.
The company now has more than 35 million page views per month, with growth in traffic stimulated by online debates about a wide range of political and social issues, says Qasem.
Like many entrepreneurs in the Arab world, he believes the region's political and economic upheaval has helped rather than hurt his business, by creating fresh demand for his products, persuading investors to seek new opportunities and making governments more sympathetic to the needs of start-ups.
"Investors historically targeted well-established companies that had very low risk and provided high returns," he said in an interview. "But now, after the Arab Spring, investors are pouring the same amounts of money into multiple smaller companies, betting a few of them will see a remarkable success."
The Arab Spring's economic disruption continues to be felt. Egypt and Tunisia are coping with waves of industrial unrest as they seek to rebuild their tourism industries and lure back foreign investors. Libya is recovering from a civil war, while sectarian unrest still weighs on Bahrain's economy. Several countries, including Jordan, have expanded welfare spending to try to buy social peace, undermining government finances.
But on the positive side, conditions for entrepreneurs are in some ways improving, officials and businessmen say. Previously, start-up companies were sometimes discouraged by authoritarian regimes eager to protect the interests of small groups of privileged business cronies. Now they are more often welcomed as tools to create jobs.
Arif Naqvi, group chief executive of the Middle East's largest private equity firm with more than 6 billion under management " said that one of the most dramatic changes in the region's economic thinking had been the realisation that smaller companies could be a better engine for growth than big state-linked ones, because they could create more jobs.
The difficulty of obtaining loans from risk-averse Arab banks, which often focus on serving large clients, has long been a major obstacle to setting up businesses in the region. Foreign aid donors like the European Union, the United States and multilateral lending bodies have stepped up efforts to fill the gap since last year. Mouayed Makhlouf, regional director for a unit of the World Bank, said it had invested 2.2 billion in the Middle East and North African region since January 2011, becoming a significant source of capital for private companies.
While endorsing the idea of developing smaller companies, governments in oil-importing Arab countries have mostly lacked the resources to provide them with more access to funding. But governments in the Gulf States, seeing unemployment as a potential source of social unrest, are paying more attention to funding smaller companies. Last year, the state-affiliated Saudi Industrial Development Fund began guaranteeing as much as 80 per cent of commercial bank loans to small companies, up from 50 per cent previously.
Increased government support is in turn encouraging more of the region's private investors to consider funding start-ups, businessmen say.
Some entrepreneurs say the Arab Spring is creating business opportunities by refocusing the attention of governments on living standards and social welfare.
Two such entrepreneurs in Dubai this year founded Agricel, a company promoting a soil-less, water-efficient farming technology that it says can be used in arid desert terrain and urban areas.
Kunal G. Wadhwani, co-founder of Agricel, says the company will offer the technology to Arab governments that have been sensitised by the political upheaval to the dangers of high food prices, water scarcity and mass poverty.
Other companies expect to benefit from governments getting out of their way. Tunisia's revolution, for example, loosened the economic grip of former President Zine al-Abidine Ben Ali's business cronies, said Ridha Charfeddine, founder of the Tunisian pharmaceutical company Unimed.