TABUK — A record number of Saudi women have established small businesses due to an increase in awareness of work culture and the availability of government and private funding. However, a number of obstacles and challenges hinder business growth that has resulted in a high failure rate among small businesses owned by women. Nawwaf Al-Mesrei, manager of Shell Intilaaqah program for the development of small and medium sized businesses, was quoted by Al-Riyadh newspaper as saying that it was important to encourage women to play more active role in running their businesses, especially considering the high unemployment rates among Saudi women. “The past few years have witnessed serious measures in this regard through the approval of many laws and regulations to facilitate and support women's role as business pioneers. Female participation in small and medium sized businesses is still very limited, however, recent trends point to an understanding of proprietorship, encouraging women to own their own businesses instead of waiting to find gainful employment,” he said. While acknowledging that many small businesses owned by women flounder during the first year due to financial or administrative obstacles, Al-Mesrei said the main reason behind such failures is the inability of proprietors to strike a balance between family and social obligations and follow the development of their businesses. “On the other hand, there are many women who have succeeded in expanding their businesses and have become effective contributors to the economy. In general, anyone running own business should employ experienced and qualified employees and be keen to benefit from the experiences of other successful business owners,” he added. Al-Mesrei called for linking project funding with training as he said a lack of training is one of the main reasons behind small business failures. “Training helps in choosing the right idea, preparing feasibility studies and alternative strategies to ensure the success of a project.” Dr. Abdulwahab Al-Qahtani, professor of strategic management and human resources development at King Fahd University of Petroleum & Minerals, said several studies in developed countries show the rate of failure among women-owned businesses is more than those owned by men mainly because of differences in management styles. He added that Saudi business women face greater challenges as they lack the necessary decision-making skills, leadership qualities and communication, marketing, customer relation, negotiation, and strategic planning abilities. “Funding agencies are reluctant to fund women businesses as they represent a high financial risk. This is because the Saudi society and culture is not very keen on the idea of banks chasing women if they default on their debts,” he said while calling for a specialized government body to support small and medium sized business owners. Ailaa Al-Shadwi, head of the Young Business Women's Council in the Eastern Province Chamber of Commerce and Industry, said the leading reason behind small business failures was a lack of financial support. She added that many other obstacles hinder the growth of small businesses such as bureaucratic red tape and a general lack of coordination between concerned bodies. “Funding agencies only support new businesses and not the established ones that are in need of funding. The requirements imposed by funding bodies must be reconsidered to cover struggling business owners. Also, in order to tackle all of the problems that women face, there should be a unified government body that one can go to in order to complete all of the required formalities and procedures.”
