CEO of Riyada Enterprise Development (RED) says private equity industry well-suited to finance SME growth in the broader MENA region, including Turkey and Pakistan
“Small and Medium-sized Enterprises (SMEs) are the engine of future economic growth and a vital source of social and economic stability,” Tom Speechley, Chief Executive Officer of Riyada Enterprise Development (RED) told business leaders, academics and young entrepreneurs at a key industry event held in Islamabad on Saturday. He added, “The provision of both financial and non-financial support to Pakistan’s SMEs is critical if we wish to see the sort of transformational change that has occurred in other emerging economies over the last few years.”
Addressing over 1,200 delegates at the “Bounce Back, TiECON Pakistan 2011” conference organized by The Indus Entrepreneurs (TiE), a global non-profit focused on promoting entrepreneurship, Speechley highlighted the support that the private equity industry could and should provide to the SME sector in order for it to become an engine of economic growth in the region’s markets.
He noted that while 90 per centof enterprises in Pakistan were SME in nature and generated 70 per cent of employment opportunities, they contributed only 30 per cent to the country’s gross domestic product (GDP). This was not a challenge specific only to Pakistan, but rather one affecting emerging markets as a whole, and an issue that needed to be addressed through the concerted support of the private and public sectors in their respective areas of influence.
Speechley said, “The case for the private equity industry to provide long term financial support to this sector is more compelling than ever. Encouraging productivity, bringing financial discipline and providing patient capital to entrepreneurs can dramatically improve the performance of SMEs as a whole – and deliver enormous returns to investors, shareholders and indeed the wider stakeholder community.
“RED is a firm believer in the investment opportunities presented by the SME sector in Pakistan and high growth, entrepreneur-led businesses in particular.”
Dubai-based Abraaj Capital launched Riyada Enterprise Development (RED) in 2010 as a $500 million small and medium enterprise investment platform dedicated to the broader MENA region including Pakistan. RED, which has already completed several investments, has developed from Abraaj Capital’s commitment to nurture the entrepreneurial community and to improve the environment in which entrepreneurs start and grow SMEs, which are poised to have a powerful economic impact on the MENA region.