Small and medium enterprises (SMEs) in the Middle East and North Africa (Mena) region are set to benefit from a fund launched by Bahrain-based Venture Capital Bank.

The $250 million fund gives investors the opportunity to be a part of the region’s unprecedented growth, while cultivating the rapidly expanding base of small and medium enterprises throughout the Gulf, the bank said. Jointly managing the fund are Venture Capital Bank and Global Emerging Markets (Gem), which is a $2 billion private investment group that currently manages over 170 different private equity and venture capital investment options.
The Mena Small and Medium Enterprises Fund, as the fund is called, is designed to be in compliance with both Islamic Sharia and international investment standards and is one of the first funds regionwide to be dedicated to the SME sector.
It aims to direct funding to promising, high-return, small to medium-sized businesses in the Mena region and around the world.
Chief executive officer of Venture Capital Bank, Abdullatif Janahi, said:  “We feel that this is the opportune time to launch a fund targeted at SMEs. The region’s economy has been experiencing unprecedented growth, but smaller enterprises that lack a solid capital base have traditionally been neglected by institutional investors during periods of such high growth. Venture Capital Bank has identified the tremendous potential of SMEs in today’s market, and the accompanying need to fund their development.
Al Janahi said the fund was launched to provide a platform for talented, dynamic entrepreneurs in the Gulf and beyond with the end result of creating broad-based employment throughout the region. A substantial factor with this innovative fund is that an unprecedented 75 per cent of the funding will directly impact enterprises based in the Mena region, with the remaining 25 per cent distributed among well-established international SMEs.
To ensure the high growth of each enterprise and to provide for a favourable return on investment, Venture Capital Bank has established criteria with which to provide the funding.
Enterprises that have a well-structured management, strong growth potential and can demonstrate attractive above average EBITDA (earnings before interest, taxes, depreciation and amortisation) are eligible. Since the fund is non-sector focused, several sectors poised for tremendous growth in the region will benefit.
“We expect to raise almost half our capital from overseas and are aiming to close the fund to investors by the end of 2006,” said Janahi. Licensed to operate in May 2005, Venture Capital Bank appeared on the scene at a time when the region was undergoing tremendous change. Liberalisation of the economies coupled with the rise in oil prices was spurring increased economic activity, and it was clear that a unique investment opportunity existed for venture capital investment banking in the GCC and Mena regions.”