FEMALE-OWNED MICRO-BUSINESSES NEED SUPPORT

For many women, their own business can be much more than moving the needle on a great idea. It provides opportunity beyond commercial success. Financial independence and wealth generation for women can be life changing. In Dubai, over 60% of SMEs are micro-businesses, and many of these are owned by female entrepreneurs.

A micro-business is typically a company with fewer than 10 employees, and a turnover of less than 3 million dirhams. Many micro-businesses are in typically female-led industries such as retail, fashion, food, cafes, services, coaching, nurseries, art, recruitment, marketing/PR and consultancies.

Despite the pandemic, there was a 4% increase in trade license take-up over 2019, with more than 42,000 business licenses being issued in 2020 according to Dubai Economy.

Last year, we saw a larger number of women from the Female Fusion Network set up their own entities. In a November 2020 survey, Female Fusion members identified that they found that creating their own business gave them more flexibility; control of their own future; better chances to charge what they’re worth; an opportunity to follow their passion and the ability to work from anywhere.

For many women, who had to stay at home and support their children with home schooling, having their own business opened up a whole new realm of possibilities.

In 2018, small and medium sized enterprises (SMEs) accounted for 99.2% of Dubai’s total enterprise population, whilst 51% of Dubai’s workforce was employed by SMEs. As the government pushes for people to rely less on government jobs, and the economy picks back up, we expect to see that number grow, with even more female entrepreneurs active across the UAE.

It was a huge boost to the UAE micro-business community when Dubai Economy launched the eTrader license in 2019. For those holding a Dubai residency visa, entrepreneurs could get access to their own trading license for only 1,070 AED. This was a game changer for entrepreneurs, especially for those who didn’t need a residency visa. However, there are plenty of business categories that are not covered, nor is it available to applicants who need a residency visa. These individuals still have to bear the full expense of setting up a company, which can sometimes be in excess of 100,000 AED, especially if you need to get office space or extra permits to be fully operational.

In order for female-run micro-businesses to thrive we need to see more support and initiatives for them. Banks need to be more supportive and understand that not everyone has a million plus dirhams working capital, as many start with next to nothing – and in fact have no need office space at all.

We would like to see an expansion of the eTrader licensing categories to industries typically used by women and decrease the fees for licensing of a micro-business – why should a business that turns over 1 million dirhams pay the same licensing fees as one that turns over 200 million? Even a ‘second tier’ option to bridge the gap between the current eTrader charges and the next available mainland or freezone options feels necessary for those whose categories (import/export for example or need for visas) do not fall under the current offer.

A typical micro-business also needs more access to opportunities. Procurement processes in particular for large companies and government entities often favour large companies and make it difficult for smaller players, especially female-owned businesses to access tenders.

One positive from the pandemic is that we’ve seen more and more female-owned businesses take their businesses online. Before the pandemic less than a quarter of micro-businesses were using e-commerce platforms to sell directly to their customers, but the pandemic pushed many of those businesses online. Those who adapted quickly saw the most success. For those that couldn’t access a payment gateway or create an e-commerce store, new players, such as Zbooni came into the market, which allowed them to create a store and send a payment link straight from an app. This was a game-changer for many female owned businesses. Women who would only sell through social media and cash on delivery, had access to a whole new range of payment tools to grow their businesses.

Female-run micro-businesses in the UAE need support to be able to grow and succeed. In the words of former IMF Chief, Christine Lagarde, “When women do better, economies do better.”