The effectiveness of business support in overcoming barriers facing Bahraini SMEs

This exploratory research aimed to understand the barriers to growth of small and medium-sized enterprises (SMEs) in the Kingdom of Bahrain, the business support provided and required and the effectiveness of such support. The findings showed that the main barriers to growth for Bahraini SMEs were the scarcity of qualified human resources, lack of finance, and fierce competition. To a lesser extent, other barriers were fees applied by many governmental organizations such as Labour Market Regulatory Authority (LMRA), bureaucracy in procedures, and the imposition of the Bahranisation percentage where owner-managers struggling to find relevant Bahrainis to accommodate the percentage required. The political instability of the country since February 2011 has affected the growth of SMEs in terms of sales and employment. The research showed that many supporting organizations exist in Bahrain, such as lending organizations, specialised government organizations, international organizations, societies (for example, professional bodies), universities, training institutions, accountants and consultants. The study found that supporting organizations provided many programmes that benefited SMEs; however, many supporting organizations were not known to SMEs, suggesting that awareness raising and promotion is required. Another finding of the study related to universities and training institutions where a bigger role was needed to close the gap in human resources, knowledge and skills and to provide qualified human resources that are ready for SMEs. Research activity needed to be encouraged, as was export support for SMEs – inevitable to overcome the barrier created by Bahrain‟s small market size. Societies need to enhance their work through specialised programmes that would suit sector-specific requirements and not just general business sessions. Lending organizations need to provide more creative packages to support SMEs growth. The efforts of support were scattered and need to be organised under one official umbrella. Government initiatives need to be promoted such as preferential procurement policies and reducing bureaucracy. Finally, an index has been developed to attempt to measure the effectiveness of supporting organizations.