UK study highlights measures to support growth of Libya's SMEs
Libya’s economy is being held back by a lack of funds for small and medium-sized enterprises (SMEs) according to a new study by Nottingham Trent University.
The study, led by academic Emhamad Elmansori, of the School of Architecture, Design and the Built Environment, shows that nearly three quarters of Libyan SMEs say a shortage of financial resources is a major barrier to innovation.
Other major barriers, according to the study, are a lack of innovation culture in schools, colleges and universities, and a shortage of skills in innovation management.
The study has been published in the International Journal of Innovation and Knowledge Management in Middle East & North Africa Vol. 3 No. 2, 2014.
It shows that 92 per cent of SMEs in Libya have no financial support. The vast majority only have the owners’ personal savings or money from their parents or partners as a form of equity.
“In many countries SMEs play a major part in the strategy for revitalising their economies,” said Elmansori, originally from Libya.
“This is especially important for a country such as Libya, which has an economy that is dependent on oil and which badly needs to diversify.
“Yet it is widely recognised that SMEs in Libya face more difficulties than large businesses do in terms of accessing the finances which are required to innovate.
“It should not be expected for people to create the industries of tomorrow with only their personal savings as a financial grounding.
“This is a problem which cannot be ignored and it’s imperative that the right policies are put in place to ensure that all barriers to innovation are removed.”
The study - which was overseen by Leslie Arthur, an expert in innovation from the School of Architecture, Design and the Built Environment - is based on a survey of almost 100 Libyan SMEs. The survey was taken in April 2012 and Mr Elmansori says its findings are just as relevant today.
It also found that the main reasons for SMEs avoiding the loans which are available is the bureaucracy, inflexibility, terms of interest and centralisation.
Mr Elmansori found that another barrier to innovation was a lack of women running SMEs due to cultural, religious and family reasons.
The study gave five recommendations to help provide more finances to Libya’s SME sector, which are to:Create an independent body to help provide access to funding from public and private sectors;Open the channels of communication to encourage funders to support SMEs.
As well as, raise national awareness of the importance of innovation and entrepreneurship for economic development;Initiate special programmes and schemes to improve the effectiveness of business incubators.
Finally, make development agencies, such as development banks, key players in establishing sponsorship of SME incubators.
Elmansori added: “SMEs can play a significant role in generating income, developing skills, creating employment and alleviating poverty in Libya.
“SME owners, financiers, banks and the government must undertake new strategies to overcome the challenges which SMEs and finance providers face.
“Only by doing so will SMEs in Libya be able to fulfil their true potential and chart the course for a better and more prosperous economic future.”
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.