Bedaya Centre for Entrepreneurship & SMEs Development was established in 2010 to support small and medium enterprises in Egypt. It provides business development services like business clinics and consultations. It also works to improve access to finance through referrals to banks and a private equity fund. Bedaya aims to promote entrepreneurship and formalize informal businesses. It faces challenges like lack of sustainability of services and scattered entrepreneurship support. Key policy priorities include a national SME strategy and incentives to commercialize research and development.

1. 1Mahi Al-Jazzar - June 21st
, 2013
Case Study of Bedaya Centre forCase Study of Bedaya Centre for
Entrepreneurship & SMEsEntrepreneurship & SMEs
DevelopmentDevelopment

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ContentContent

3. I-Bedaya Centre Profile
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 Establishment:
– Bedaya Centre for Entrepreneurship and SMEs Development was
established in January 2010 according to GAFI Board statement, in order to
implement the strategy of supporting and developing small & medium
investments
 Mission:
– To support the growth and development of the SMEs in Egypt; in line with
the National strategy toward raising the economic development indicators.

4. Key Pillars
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Improve Business ClimateImprove Business Climate
Perfect
Place for
SMEs
Business
Developme
nt Services
Informal To
Formal
Entreprene
urship
programs
Access to
Finance

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II-Business Development Services
Business Clinics Program
 Providing free-of-charge consultations from professional volunteer
consultants in various business disciplines including but not limited to:
Legal
Financial
HR
Planning
Management
Marketing
Business
Improvement
IT
 Consultations are provided through one-to-one
meetings between the SME and the consultant or
through workshops.
 Until May 2013, Bedaya has provided 552
consultations to entrepreneurs and SMEs

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III- Access to Finance
Financing gap: SMEs sector accounts for 80% of the active
economic units in Egypt; however, can access only 10% of the
available finance from banks.
1.Conventional Financing:
•Referrals to banks
•Credit Guarantee Company
Only 5 SMEs have got the required funding out of total
Number of 43 files that were submitted through Bedaya Centre
2.Non- Conventional Financing:
•“Bedaya 1” Private Equity Fund

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III- Access to Finance
Bedaya Private Equity Fund
 Established according to the provisions of the Capital Market Law no. 95/1992
 Main objective is to provide -SMART CAPITAL- and know-how support
required to promote the growth of the Egyptian SMEs
 “Bedaya 1” fund has been launched in 18th
February 2013; licensed with total
size of EGP 134 Million and fixed term of 10 years.
 It invests in companies registered under the provision of Egyptian laws, with
capital not less than EGP 2m and do not exceed EGP 50m
 “Bedaya 1” fund is managed by Al-Ahly for Development & Investment (ADI)
one of the most competent and experienced local fund managers in Egypt
 “Bedaya 1” invests in all sectors except in Tobacco, Alcohol, gambling, import
and real estate
 Investment policy considers sectors and geographic diversification, with
majority of the fund portfolio dedicated to investments outside Greater Cairo
(60%)
 10% of the fund portfolio is VC, with special focus on innovative start-ups
 “Bedaya1” has already invested in 3 companies; another 3 companies are
about to sign the terms sheets shortly and other 8 projects are currently in the

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IV- Entrepreneurship
Bedaya Center designed its entrepreneurship program to promote the entrepreneurial culture
among youth and transfer their mindset from job seekers to job creators. Meanwhile, acting as
a catalyst, building and integrating with other entrepreneurship initiatives and programs.

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V- Informal Sector
 Studies have shown that:
– Number of the informal economic units in Egypt was estimated by around 1.5 million in
2010 (MBDI – EIB 2010)
– Informal employment was estimated at 8 million workers excluding agricultural activities
according to ILO statistics in 2009.

10. V- Informal Sector
Pilot Project
10
 GAFI Bedaya launched an initiative to formalize the informal units in cooperation with
key government stakeholder
 Two key areas were selected for the pilot project namely “Masheyet Nasser and Ezbet
El Nakhl”
• The high volume of working entities estimated at
around 4,300 in both areas with an annual turn-
over rate ranging from EGP 1 – 2 million each
 A working group was formed under the leadership of
GAFI and Bedaya Centre and including several governmental stakeholders.
 Key outcomes:
• 70 economic units were formalized
• Tax law is being reviewed to exempt formalized units from the previous tax due
• Streamlining government procedures (Registration, Licensing, land allocation …)

11. VI- Underway Efforts to Commercialize R&D
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 MoU has been signed between “Bedaya 1” investment Fund and the Academy for
Scientific Research & Technology ASRT to:
1. Cooperate in supporting innovative and technology-based entrepreneurs and SMEs
2. Establish an intermediary corporation similar to the Malaysian model “MTDC”, which
provides funds, mentoring and incubation; in addition to other value added services for
technological and scientific research in order to travel to the market
 The Company’s objectives revolve around:
• Facilitating patency and IPR registrations for scientific & technological researches,
• Guiding entrepreneurs through all the technical support and consultations required
for their businesses
• Selecting the best qualified entrepreneurs to run and manage new ventures based
on the transformation of scientific researches into market applicable products and
services
• Facilitating licensing of universities techno-researches through various means such
as alliances, joint ventures or through new ventures

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VII- Challenges & Key Policy Priorities

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Challenges
 Ecosystem Challenges:
• No unified definition for SMEs in Egypt
• Lack of a champion responsible for SMEs
• Lack of information on number of SMEs and their contribution to GDP
• Weakness of the legislative environment especially the bankruptcy law
 SMEs Challenges
• Access to equipped, feasible priced lands
• Licensing (no central mechanism, high cost for hiring legal representative)
• Weak competitive advantage in front of larger businesses
• Access to Finance
• Access to BDS (on both levels, the supply and the demand)

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Challenges
 Bedaya Centre Challenges
• Sustainability of the provided BDS (mainly depending on volunteers consultants)
• Entrepreneurship support efforts are scattered and not embedded officially in the national
economic agenda
 Commercializing R&D Challenges
• Complete separation between academia and industry (an innovation study on Egypt has
shown that less than 6% of companies go to universities when they face problems)
• Earning the trust of researchers is a challenge, as they may not believe in the possibility
of real commercialization and may be skeptical in working with business.
• Academia is not oriented towards commercialization, as commercialization does not go in
the promotion process along with publication. Therefore, its not applicable to have applied
research and clear IP strategy
• Financing early start-ups is very challenging
• No formal networking between the academia and the private sector; also between
entrepreneurs and potential investors (no mechanism of finding the right match)
• Lack of ability to assess the feasibility of the idea traveling to market

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Policy Priorities
 General Policies
• National Strategy for the development of SMEs and Entrepreneurship that would
advocate Bedaya Centre as the champion in this concern
• Creating the link between BDS and access to finance in a structured mechanism
• Drafting a law for SMEs with a set of incentives, which some efforts are currently
underway.
 Commercializing R&D Policies
• Government to interfere in early financing for entrepreneurs, especially that private sector
is skeptic in this phase
• Develop an incentive scheme for companies spending on R&D
• R&D financing policy, with an eye on commercialization
• IP policies and its enforceability
• Establish and properly structure university incubators where R&D could be
commercialized

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Thank You