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Development Until of Small-Scale Enterprises

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Development Until of Small-Scale Enterprises In Yemen

Small-scale enterprises play an important role in the economics of the countries in accordance with their relative levels of development.

International experiments indicate that several countries in south-east Asia secured noticeable achievements during the eightees and ninetees; while transforming from consuming to productive forces; so as to represent today an important figure in the formula of international trade. This is partially due to the great concerns devoted to the small-size product and small-scale enter prices, and by treating them a new scope for development proportionally suitable to proceed in line with the alarming increase in population figures. It was also due to little investments needed by the small-scale enterprises. This in-turn is manipulated through utilizing both the excess of the labor-force and sources of supply available to satisfy the requirements of development and market's demand. The effects resulting from processing small-scale enterprises contribute in achieving development through:

-capability of creating; with less-effective costs; job opportunities; - accomplishing a more-balanced geographical development; -more access to women's contribution in the process of development; -comprehensive integration with the other industries / enterprises. Thereby, the "Development Unit of Small-Scale Enterprises" in Yemen was established in 1991 to form a nucleus of the first banking organization specializing in financing the small-scale enterprises in the Republic. This establishment came through a joint-support project maintained by the government of the Yemen Republic, the UNDP Office of Capital Growth and the Government of the Netherlands. The project's value was estimated 8,5 million rials, while an additional 4,8 million dollars were spent to finance the implementation of the project's Phase I.

The Project work-plan started by a preliminary experimental program which lasted for three years. This program was initiated to finance one hundred small-scale enterprises, and was objected to be developed further according to the findings of this experiment.

The Unit actually started executing its activities since mid 1991 Moreover, the Unit's objectives were meant to contribute and participate in the following lines:-

-encouraging the establishment of small-scale enterprises; - creation of new job opportunities; - establishing industries/ enterprises meant to stand in place of the imports; - developing the administrative and technical expertise of the small-scale investors; and -supporting the activities of the women's community. Phase I of the project lasted till end of 1996, and phase II as from 1997 then started by expansion and re-organization of the Unit's activities and organizational structure; as well as, development of its financing policies through extending its scope of services to include all regions of the Republic. Such extension was objected to proceed within the framework of the efforts exerted by the state in combating poverty and unemployment. At the beginning of 1998, the Netherlands government-through a "Memorandum of Understanding " with the government of Yemen-offered one non-returnable assistance fund of 4,6 million Dutch Guilders. This has been provided for developing the organizational framework of the Unit to become an independent company performing within its own economic basis. One branch of the Unit is already inaugurated and established in Aden, while the other is expected to be established by the last quarter of 1998 in Hodeidah. The financing by the Unit is functioning through the provision and direction of loans, or accredited funds, for the basic components of every single small-scale enterprise. These constitute the machinery, premises and the operating capital that is estimated as required for one production process.

Upon presenting the necessary information by the concerned small-scale investor applying for the loan, the Unit is adopting a flexible system that facilitates granting that loan within a period ranging one to four weeks only, but in compliance with the loan amount and relative specifications of the project.

The financing policy is, on one hand, executed through two main programs. The first is directed towards the youth groups and small-scale investors for the purpose of contributing in diagnosing the side affects of reforming the frameworks of the economy. It has been designed so as to facilitate and encourage the opportunities for this sector of the community to indulge into undertaking new private enterprises of small-scale features, instead of searching jobs for themselves.

On the other hand, the objectives of this program are represented within the followings:-

-Establishing small-scale forms of projects that may make available opportunities of new jobs;

-Encouraging the undertaking of simple handicraft activities and other hand-operated crafts that may secure good source of incomes for the poor communities of rural regions all over the Republic. The community's sectors for whom the program is mainly aimed are the poor families; handicapped groups; unemployed males and females; the widowed and divorced women.

While the second program is specifically aimed for development of the activities engaged by the poor groups of the society. It mainly constitutes providing of loans; on easy-terms of payments; for those poor families that are engaged in undertaking productive, or income-generating activities. The purposes here are to increase their incomes and up-grade their members' standard of living.

Since its establishment, the Unit's number of approved loans amounted 758 and valued 362,8 million rials. Proportionally, the females have a 40% of the sharing in these loans, while their male partners secured the other 60%. Throughout the period 1991-1997, the table below shows the individual granting of these amounts accredited:- The Year Number of loans Total annual value of the loans in millions of rials. 1991 28 10.2 1992 43 12.2 1993 70 43 1994 117 32.8 1995 94 65.1 1996 190 92.2 1997 216 107.3 Grand total 758 362.8

_________________________________________ Source: Al-Thowra Newspaper, issue dated 29/7/98


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