Many NGOs have long been assisting young people in starting their own businesses. However, now the government has also stepped in, establishing a new initiative called Fekretak Sherketak. This is Arabic for “your idea is your company” and is an initiative under the supervision of the Ministry of Investment and International Cooperation (MIIC), in partnership with the General Authority for Investment and Free Zones (GAFI) and the United Nations Development Programme (UNDP), among others. It offers financial, technical, administrative, communicative, commercial and legal assistance to those who wish to start a project as well as places to start it. Financial support ranges from LE100,000 to LE500,000. Experts are now touring the governorates in the Fekretak Sherketak bus looking for entrepreneurs. Those with the best project ideas will go through an extensive training course or “entrepreneurs' hub” lasting four months. The slogan of the initiative is “the country is investing in its youth”. Fekretak Sherketak is defined as a start-up accelerator created to support and empower Egyptian entrepreneurs to develop innovative businesses for today's competitive economy. In a press conference on 12 September, Minister of Investment and International Cooperation Sahar Nasr launched the initiative and the Egypt Entrepreneurship Programme (EEP), a comprehensive platform designed to catalyse the entrepreneurial ecosystem in Egypt. According to the minister, the initiative is the outcome of the MIIC's support for Egypt Ventures, an investment company with a capital of LE451 million co-financed by the MIIC, the Saudi Fund for Development (SFD) and an Egyptian investment bank. It was established a month after the minister took office within the framework of providing start-up capital to build financial inclusion as a first step towards building a solid basis for a strong economy. Nasr said the programme would be applied in various governorates and investment areas nationwide. It is the second activity financed by Egypt Ventures, the first being the Flat6Labs programme in July 2017. “Promoting the growth and competitiveness of start-ups is a major driver of economic growth and job creation. We have recognised an initial financing gap in Egypt and so have developed the Fekretak Sherketak programme to provide new projects with financial, technical and legal support so that they can grow and prosper,” Nasr said, adding that entrepreneurship was also encouraged under the new investment law. She emphasised that the MIIC would work on promoting the ideas of young people and called on all stakeholders including international financial institutions and the private sector to support the initiative. GAFI Deputy CEO Mohamed Abdel-Wahab said that the new investment law's executive regulations would provide for supporting entrepreneurship and the education and sports sectors. He said that the new companies law included a chapter dedicated to sole proprietorships that would encourage youth to invest. UNDP Country Director Randa Abul-Hosn expressed her appreciation of the initiative, noting that the UNDP aimed to support Egypt's sustainable development and that this initiative would not only support young people in transforming their ideas into profitable projects, but would also focus on the social impact of such projects. Nasr among keynote speakers at the press conference of the initiative OPEN TO ALL: “Anyone can participate in Fekretak Sherketak. All you need is an innovative idea for a high-growth product or service and a group of individuals who have complementary skills to transform their ideas into a profitable project,” said CEO of Egypt Ventures Shehab Marzban. “The idea originated from the ministry as a team. Minister Sahar Nasr is interested in starting initiatives that focus on youth, saying that young people are the basic resources of the state and employing them does not just give the state a source of income but also affects the number of companies established as well as growth,” Marzban told Al-Ahram Weekly. “The idea was followed by meetings with the private sector and other institutions that recommended that Fekretak Sherketak be extended to reach young people in all the governorates.” He said the initiative was different from what had come before since it concerned assistance in partnership with an independent partner, the private sector, which would help guarantee the success and durability of projects. “The ministry started working last February with a team on the new investment law, focusing on a very important part, namely supporting entrepreneurship. This is the first time that a law has pointed to entrepreneurship as an important part of development and complementary to investment. From this came the idea of establishing Egypt Ventures, a company for entrepreneurship,” Marzban said. “Some 1,204 applicants from 26 governorates have presented ideas, being the majority of the governorates in Egypt. About 12 to 13 per cent of the applicants are women. The average age is 33, with the youngest aged 15 and the oldest in his 50s,” Marzban added, commenting that the MIIC wanted to increase the number of female participants and was looking to the media to encourage this. The applicants had included people from different backgrounds working in fields like technology, industry and renewable energy. The first stage is for the young people to present their ideas, these then being judged by a committee that measures them against three standards: the idea itself and how likely it is that it can be translated into a successful company that can function for a reasonable period of time. According to the scores they get, the groups are shortlisted. “The bus that will meet the participants has started its tour around the country. The committee will talk to each group of participants and then organise a recorded interview to allow them to explain their idea in a couple of minutes. In October, the participants will be shortlisted for the semi-finals, and these will be admitted to the entrepreneurship hub and invited to a workshop during which discussion will start on the details of the projects to measure their ability to carry them out and so on,” he added. This phase is open to all good ideas, no matter their number. “It will be followed by the final choices of the companies working with us. Since this process is organised twice a year, during the first cycle we will choose around 30 ideas that will be accepted in the three entrepreneurship hubs for a four-month programme. During these four months, they will get the financial support they need to establish a company.” The participants will be given offices to work in, will see other projects at work, and will meet experts who will help them with their ideas, Marzban said. Each cycle will culminate in a demonstration day when the founders will present to a large audience of investors. But the programme's support does not end there, as it will continue to help the founders for the life of their companies, says the ministry website. “The main barriers that face young people, especially those establishing companies for the first time, are that they do not have a track record or experience in dealing with banks in terms of getting loans. Another problem is that even if the funding is there, there are some types of ideas that grow in an exponential pattern, meaning that in the beginning phase growth is slow but after that profits go up sharply,” Marzban said. “These types of projects need funding so that risks are shared equally. A partner in this case will take a share in the company, and when the idea is successful profits will begin to increase.” A four to eight per cent partnership agreement has been determined according to international standards for business hubs as fair for this “seed stage”.
BUILDING ON EXPERIENCE: This is not the first time the government has sought to assist young people in starting businesses. “There was the Bedaya [Beginning] Centre, which used to provide services for developing companies focusing on visiting universities and organising courses. However, the system then was not complete since there was neither a financial perspective nor was any project looked at from the perspective of an investor,” Marzban said. Nasr said that the new investment law meant that the EEP comprised four main components: finance, start-up accelerators, business service centres, and new legislation and regulatory reforms. These would help young people to start their own projects, helping to provide new job opportunities and contribute to economic growth. According to Marzban, the financing is in the form of soft loans, and the accelerators will provide company offices as well as centres to serve young entrepreneurs. Entrepreneurship hubs will be activated through partnerships with the private sector, and the legislative environment will be improved by amendments or new laws to support entrepreneurship and company growth. “The solutions are in the form of business hubs, partnerships and programmes like Fekretak Sherketak. We are starting projects with young people as partners through financing, while they are partners through their time, efforts and innovative ideas,” he said. Ideally, they are looking for passionate entrepreneurs dedicated to building businesses with unique value propositions for potentially large markets. Teams should have complementary skill and be driven and willing to learn. “The programme is a long-term one. The entrepreneurship hubs work for five years with 10 cycles, and there are clear plans to help young people set up companies by making available investment funds to decrease risks and increase sources of funding. The ministry aims to present new financing packages in other fields that will help other types of projects, such as in investment zones or huge platforms like collective transport and the like.” “We could see young people coming up with innovative and efficient solutions to financing public transport, for example,” Marzban concluded.
