NBFâ€“banking options for female Emirati entrepreneurs
National Bank of Fujairah has made moves to accommodate the financing needs of their female Emirati clientele.
According to the 2015 Female Entrepreneurship Index developed by the Global Entrepreneurship Development Institute, one of the weakest areas identified for the MENA region, and the UAE, was access to Tier 1 financing, pertaining to debt capital and financial literacy.
Further information available from the Ministry of Economy suggests that the rate of women setting up businesses rose from a rate of 0.1 per cent in 2006 to 1.4 per cent in 2011. Today, according to the Ministry, approximately half of the SME sector is managed by women. Although hard data remains difficult to come by, the Government has flagged this segment as a national priority, according to Zainab Hussain Ahmed Ibrahim, Unit Head, Elham at National Bank of Fujairah (NBF).
She added that focus groups that were organised by NBF led to the conclusion that Emirati businesswomen and entrepreneurs greatly appreciate more support for their aspirations. As such, NBF Elham, a collection of banking services for Emirati businesswomen, was established in 2015 against a backdrop of growing national awareness of the economic contributions made by this demographic.
“Whilst the UAE has issued countrywide directives committed to easing the transition of Emirati women into the corporate world, statistical and anecdotal evidence suggest that local female entrepreneurs, regardless of their strong ability and desire for success, still face challenges in receiving the appropriate support for their businesses,” said Ibrahim.
When developing the product to cater for their business needs, the bank had to consider several different factors, from its mission and commitment, to supporting the local economy.
“Through various discussions with our Emirati clients and female relationship managers it was obvious that although the entrepreneurial spirit is very much alive in the UAE, many Emirati women entrepreneurs are not aware of, or do not have ready access to, the working capital, financial tools and expert guidance that would otherwise be available to other business owners,” said Ibrahim.
She added that Emirati businesswomen play an increasingly crucial role in the future of the UAE, and as a customer segment, it is certainly deserving of greater attention from the local banking sector. Just as the government is actively pushing for greater inclusion of talented local women into the socio-political and economic spheres, the team at the bank felt that there is much more that NBF can do on the ground to support the growing number of female Emirati businesswomen.
In many cases, a number of Emirati women work from home without establishing business premises, while many others have reported a lack of financial literacy to meet the minimum requirements of corporate lending.
“This particular segment of banking faces many challenges on an ongoing basis. The fact that we are targeting a niche segment within the market only emphasises that local sensitivities will naturally resurface, and that communication across the board requires a unique approach that specifically targets Emirati businesswomen,” said Ibrahim.
She added that since the UAE is a male-dominated market, women often find it challenging to break out and obtain the required financing for their new business ideas. Many even lack the confidence or business knowledge that would help them develop their ideas into established companies.
“Many NBF Elham clients have not approached banks for corporate facilities in the past, and are excited by the prospect of developing business with this unique solution. The fact that NBF Elham actively supports women by offering banking and advisory solutions; financial literacy workshops; engaging activities to further develop and educate Emirati women; as well as a dedicated team of Emirati relationship managers to maintain a solid relationship with clients and provide them with the support they need, the offering has received a great deal of interest in the market,” said Ibrahim.
However, Emirati businesswomen still prefer traditional banking to modern-day solutions including online banking. Enthusiasm towards the online offering will still require sometime before it catches up with that of the traditional offering.
NBF Elham caters to a wide spectrum of clientele, not just existing NBF customers. Financial solutions are available to small corporates with turnovers of less than AED 10 million to larger companies with turnovers greater than AED 40 million.
There has been an interest in NBF Elham from clients in various industries including but not limited to design, engineering, education, and trading. Current accounts can be opened for corporates with businesswomen working under the Intlaq scheme [an initiative by the DED to encourage more UAE nationals to set up businesses from home], as well as for newly established companies and for well established businesses.
There are different qualifiers for current and new businesses. An existing company can only apply for an NBF Elham account if the company or a share of the company is owned by an Emirati businesswoman. It is a must for the Emirati businesswoman to be an active partner in the business, said Ibrahim, particularly when it comes to business operations and decision making. Supporting documentation required includes a valid trade licence, a passport copy, and the Emirates ID of the business owner.
For new companies, standard procedures apply. The bank will do its due diligence; take a look at the business model and assess collateral or guarantees. Once these are in order, the bank will then provide credit facilities according to the business’s needs and cash flows.
From a lending perspective, the core principles remain; credit facilities will be provided to businesses with established track records and viable business plans.
“NBF Elham will ensure that the entrepreneurial spirit amongst Emirati women is matched with their access to working capital; financial tools; and expert guidance. It aims to level the playing field for aspiring Emirati female business leaders and pave the way for their greater participation and success in the local economy,” added Ibrahim.
She added that NBF Elham is a programme that aligns with government directive in pushing for greater inclusion of talented local women into the socio-political and economic spheres, while encouraging a stronger entrepreneurial culture within the country as well as partnering with Emirati businesswomen as they achieve further breakthroughs in their respective industries.
“Despite the statistical and anecdotal evidence that suggests that local female entrepreneurs, regardless of their strong ability and desire for success, still face challenges in receiving the appropriate support for their businesses–with more than 44 per cent of women stating they feel a lack of support, and with a success rate of only 40 per cent of female business-owners–NBF Elham still aims to help female entrepreneurs overcome such challenges and contribute towards the growth of the UAE economy,” said Ibrahim.
The programme supports the UAE’s government ambition of becoming one of the world’s top 25 countries for gender equality by 2021.
The full interview with Zainab Hussain Ahmed Ibrahim can be found here.