The chief executive of Abu Dhabi’s new start-up incubator, Hub71, called on UAE banks to streamline the process of setting up accounts for new companies, and bring in other regulatory improvements to make it easier for fledgling ventures to launch operations.
“Here in Abu Dhabi I can set up a business very quickly, but getting access to basic financial services – such as setting up a bank account – is still an area we need to work on,” said Mahmoud Adi, chief executive of Hub71, which is based within the Abu Dhabi Global Market (ADGM) financial free zone and launched in March.
“I’m not talking about [securing] a loan facility – I’m talking about things like how to deposit your investor money and manage your expenses, right from the start. That sort of requirement is still behind.”
It can take between one and three months on average to set up a bank account, and for fledgling start-ups there is no certainty they will be able to open one at all, he told The National on Monday.
Hub71 has engaged with the UAE banking sector, including the central bank, in an attempt to iron out “multiple issues” with the system that it claims causes unnecessary delays for start-ups. Often, this is to do with “legacy infrastructure” within the bank, while people have also reported that certain UAE Central Bank regulations need updating or revising, Mr Adi said, without providing details.
According to a poll last year by the Dubai Chamber of Commerce and Industry in conjunction with the UAE Ministry of Economy, Council of Small and Medium-sized Enterprises and the global consultancy Roland Berger, 65 per cent of respondents reported setting up their company's bank account was a struggle.
Hub71 was created by Abu Dhabi’s Mubadala Investment Company, ADGM, US technology giant Microsoft and Japan’s SoftBank as an initiative of the Ghadan 21 programme, a Dh50 billion package of reforms from the Abu Dhabi government to stimulate the local economy.
Increasing the contribution of SMEs (small-to-medium-sized businesses) to the national economy is a key objective of the UAE’s broader growth strategy. Under the UAE’s Vision 2021 economic roadmap, the federal government aims to increase SMEs’ contribution to gross domestic product to 60 per cent by 2021, from around 53 per cent today.
It has already put in place measures to boost the number of SMEs, including cutting set-up fees for new businesses and removing other red tape, as well as creating accelerators and grant programmes to improve access to markets and finance.
At an event on Monday, Hub71 and its corporate partners – ADGM, Abu Dhabi Department of Health and real estate firm Aldar Properties – launched its latest initiative, a competition to attract the Middle East and North Africa’s best entrepreneurs to Abu Dhabi.
The Mena Growth Competition is run in partnership with the MIT (Massachusetts Institute of Technology) Enterprise Forum Pan Arab, which works to strengthen the region’s entrepreneurship ecosystem.
Also on Monday, Elham Al Qasim, acting chief executive of Abu Dhabi Investment Office, which oversees the Ghadan 21 programme, unveiled the first winners of its Dh535 million Ghadan Ventures Fund, which aims to match venture capital funding already secured by an Abu Dhabi start-up.
The four winners were FinTech firm Bitoasis, children’s digital service Lamsa, nutrition app Yacob, and construction procurement platform Protenders.