For the last five years, Areije Al Shakar, vice president and deputy head of development services at Bahrain Development Bank (BDB), has built a reputation as the woman who has helped transform the start-up scene in Bahrain.
Al Shakar leads Rowad Programme, an initiative built upon the success of the bank’s Bahrain Model of Entrepreneurship recognised by UNIDO.
Launched in 2015, the Rowad programme is designed to assist and empower entrepreneurs in starting their businesses, with its main pillars - coaching, training, mentoring, incubation, and funding.
“What we do, which is very unique when compared to other players in the market, is that we offer a lot of services to entrepreneurs at the idea stage,” Al Shakar says. “Most accelerators won’t even talk to you if you don’t have an idea on paper or some kind of traction. But what we do is that we get those entrepreneurs, and some of them can be very innovative and adventurous, and partner them up with someone who is more business-minded to get that invention up to more of a commercialisation.
“The moment the entrepreneur joins the programme, they can avail any of the services on our online platform. So, even if they only have an idea, they will be able to know how do to get it on paper, how to start, where to go, what different accelerators are available in the ecosystem here in Bahrain.
“We take pride in our coaching programme because we feel it is very beneficial to entrepreneurs. We’re getting them to empower themselves and to guide themselves to be able to take that idea and bring it to start-up stages.”
Imparting sound advice first brought fame to Rowad among local entrepreneurs, but it quickly started standing out from the ‘support crowd’ due to an extra effort its leaders have been willing to invest.
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Rowad hosts a number of incubators, including the Bahrain Business Incubator Centre (BBIC), the first mixed-use incubation center in the GCC; Bahrain Women Incubator Center (Riyadat), a collaboration between BDB, Supreme Council for Women, and BBIC; and the ICT Incubator Rukn.me.
Furthermore, the bank has developed a number of sector-specific initiatives, such as the Arts Cluster and the Farmers Market.
“The culture has changed in these few years from a time when people barely used the word entrepreneurship, and now we are thinking about how many entrepreneurs we have and whether they are all really entrepreneurs,” Al Shakar says.
“The younger generation wants to make a difference, they have that energy.”
The region has a population of over 200 million young people. In Bahrain, around 35 percent of the population is under 25 years old, and being technology savvy they look for start-up opportunities. “In Bahrain, we have a lot of innovative start-ups in the food and beverage industry, which aligns very well with our tourism sector,” says Al Shakar. “ We also have a lot of e-commerce apps that are coming up within our space, and we do have talent in the medical technology sector. I also think what is coming up is the financial services technology space (FinTech).
“That would probably be coming up at a faster speed once the regulations actually meet up to the entrepreneurs’ speed as well.
“In general, I would say tourism, ICT and healthcare are the main sectors for now, and we also have many start-ups in light manufacturing.”
By any measure, Al Shakar is the portrait of millennial success, ticking the boxes of all of its elements including failure. Having earned a master’s of science in public policy and management from the University of London, the young Bahraini started her decade-long career in the banking industry.
The year of 2008, the turning point for many of her peers, saw her shut down her computer at Lehman Brothers, her employer at the time. She was quoted as describing the episode as ‘a blessing in disguise’ because it led her to head home to ignite change.
However, in spite of her understanding of the local culture and the wealth of her international experience, the task at hand was not easy.
“Not only in Bahrain but regionally, it is very hard to get a traditional society, where everything has to be well calculated, to support this,” she says. “There was resistance. But when we saw a need, we realised that it was very easy for us to go out and do all these youth awareness programme, but what were we actually going to give them?
“This is when the resistance actually begins because you want to disrupt the traditional ways in order to allow this access. The reason is that you don’t want very innovative entrepreneurs to leave and go somewhere else where somebody else is going to believe in them.
“We pride ourselves on being on the side of the entrepreneur. We think like them and we understand them.”
Established in 1992, BDB is licensed by the Central Bank of Bahrain to fuel the growth of the kingdom’s private sector. In addition to debt financing options, which include loans, letter of guarantee (LG) financing, and trade finance, the bank offers different equity funding options.
Those include a pre-seed grant scheme of BHD 5,000 ($ 48,000) given by BDB and Tamkeen; an equity investment scheme by BDB Investment Division; and a support through BDB’s partnership programme with other start-up funds and venture capital entities across the region.
However, in 2015 Al Shakar decided that innovative start-up ideas, which prove the potential to have an economic impact and produce job opportunities, should be supported from the very early stage. BDB’s Seed Fuel Programme, launched in 2015, offers BHD 25,000 ($ 244,000) for around 20 percent equity once the idea is turned into a venture. One Seed Fuel investment was made in 2015, she says adding that they expect to support eight projects in 2017.
What argument wins the battle within a conservative national bank in a traditionally risk-averse society to agree to fund a start-up at the earliest of its stages?
“When you are a bank and you are offering loans, there is always a risk that someone will not pay back the loan, so there is always a non-performing loan risk,” she explains. “And then let’s say you take a little percentage of that budget and you say: ‘Okay, there is a 30 percent non-performing loan risk, and I can take 15 percent of that number and invest it into these innovative start-ups.’
“This way or the other, you are going to lose that money anyway, so why not try to see whether you are going to get your Talabat or Bayt.com or whichever of these ones.
“It was about bridging the gap between people from older generations and the younger generation wanting to make an impact. You either let them cross the border to go to Dubai, Qatar or Abu Dhabi, or even to the United States and Europe, or you want them to stick here in Bahrain.”
Manama’s tech and start-up scene has flourished in the last few years.
If one of the local success stories becomes a household name, Al Shakara says, more local investors would start believing in them. “We have worked so hard with entrepreneurs and we are now happy to say that we have them, but now how do we get the investors to believe in them? Other than a few pioneers we have in that space, I think the minute you see someone succeed that is when the rest of the investors will follow.
“It is something relatively new. People are used to putting their money into real estate. That is the type of mentality we have here. We are now pulling them away from that and telling them to put their money into start-ups, even 10 percent, as a way of giving back. We come from a culture, and a religion, that it is important to be able to give back. That is what we are trying to focus on, that whole element of paying it forward.”
With Areije Al Shakara and Hasan Haider driving this change, we can rest assured that a Bahraini start-up success story will grab newspaper headlines in the months to come.