Small and micro enterprises: A solution derived from necessity [Archives:2008/1185/Business & Economy]

August 28 2008

Tareq Al-Adel
For the Yemen Times

With an employment rate of around 30 percent according to Ministry of Labor statistics, Yemeni youth realize they need to find new ways for generating income. Each year Yemeni universities produce hundreds of thousands of degree holders many of which end up unemployed especially that their area of specialization does not meet market demands, so they compromise.

Skilled youth are increasingly opting to start their own businesses and become young entrepreneurs making a place for themselves in the market, despite some challenges. With the right tools, many have succeeded to start more than one business. According to the License Department in the Municipality in Dar Salm, there is a 15 percent increase in the number of licenses given to small and micro enterprises in Sana'a compared to last year.

With the majority of Yemeni entrepreneurs having previous knowledge in their chosen field of business, experience, leisure pursuit and willpower are the dominant impetuses that make them succeed. Taha Al-Awdi who owns a pharmacy called Sama says, “My hobby is the only thing I had to start this business”. Ali Al-Masoudy an electronic and perfume dealer cites his experience as the reason for his success. Others start their own businesses depending upon their will. Khalid Al-Wisabi, a clothes merchant, said that only willpower made him successful in the market as he did not have any prior experience in the field.

Challenges of starting a new business

As with every new business there are obstacles. For some entrepreneurs, finding the capital money to start the business is the main challenge. They usually borrow the money from a relative because they are not familiar with the financial institutions that facilitate such loans, or because their proposals are not easily accepted by such institutions. For those who manage to have enough money to start their businesses, establishing themselves in the market place becomes easy enough especially that there isn't much competition in many of the skill related trades. After sometime, not only do they repay their creditors, and make profit, some even expand their business. Often, the businesses were started elsewhere, and then relocated to better locations. Adnan Al-Kamel a food shop owner said, “It is easy for me to start this business because I started the same business in another place but I decided to relocate to do better”.

Starting a new business requires an official license from the various permission issuers depending on the type of business, and according to some businessmen “it's not always easy”. A pharmacy license has to be issued from the Ministry of Health while most commercial businesses get their license from the Ministry of Public Work and Housing (Municipality). Many businessmen say the Ministry of Health is stringent in issuing its license while the Municipality is more lenient in it terms. The license department in the Municipality is making license service easy, cheap, and quick to citizens. Unfortunately, people who open new businesses are not taking advantage of this service until they are encountered with trouble. The license department gives up to three warnings for the businessman to obey the Municipality rules and obtain a license. Saleh Ghilan who is the manager of the license department in the Municipality at Dar Salm said, “The fee we take is for hygiene, development, and advertisement”, “We always go by force to get people who open new businesses to have their license”. Ali Al-Sofyani the manager of the Municipality of the Ministry of Public Work and Housing in Dar Salm said