Due to financial struggles and market challenges, about 200 small and medium enterprises (SMEs) in Bahrain including construction and advertising firms could close down.
The companies, who have reportedly been struggling since last year, have called on The SMEs Development Society to help instate new measures to protect them, according to Gulf Daily News.
The organisation has since met with the Commerce and Tourism Ministry and Bahrain Chamber of Commerce and Industry (BCCI) to find solutions and prevent the job loss of over 2,000 employees including Bahrainis.
Officials pointed out that the same companies were given funds of up to $26,500 (BD10,000) in 2012 to restructure and get back in business.
While financial assistance to the firms is of importance, an examination of their audit reports since their 2012 funds a must, according to society chairman and BCCI SME committee deputy chairman Ahmad Al Saloom.
The society’s vice chairman Khalaf Hujair also said a ‘transparent and appropriate procedure for giving financial support to those companies’ is needed. He said some SMEs need counselling to improve their businesses.
In April last year however, the BCCI and Tamkeen proposed a $26.5 million (BD10 million) fund to resurrect over 100 failed SMEs and train their owners to prevent future failures such as bankruptcy.
SMEs contribute around 28 percent of Bahrain’s Gross Domestic Product. The number is expected to reach 35 percent by 2018.
Chairman Al Saloom has proposed a legislation similar to Chapter 11 of the US bankruptcy code which protects companies from creditors, allows them time to restructure, and offers them a grace period to pay back their debts or principal interest amount on their loans.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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