The lawyer AREEJ HAMADAH launched a specialized incorporation initiative for small and medium enterprises (SMEs), with the aim of addressing the situation of stumbled entrepreneurs and those with constructive ideas. During a seminar held at the headquarters of the Bar Association, she presented a draft law on the establishment of the alternative investment market, which is the first experience in drafting a serious law that cares for this group of young entrepreneurs, both men and women.
In the draft, Hamada presented the historical sequence of launching the initiative, which began in 2014 with the initiative to establish a specialized stock exchange as a means of financing. In 2016, she chaired the Economic Committee of the Bar Association and organized an economic forum to discuss the establishment of the relevant stock exchange. In 2017, she published part of the study that she conducted, comparing it with international experiences.
Caring About the Youth Initiatives
For his part, the President of the Kuwait Bar Association, Sharyan Al Sharyan, expressed his happiness that there is a clear interest in this type of initiative wishing for more attendees next time, stressing that this initiative will benefit all young people and entrepreneurs who own small and medium enterprises. Since there are countries, governments, and leaders that have adopted this initiative in pursuit of a real recovery of the national economy in those countries that understand the meaning of small projects and the actions of entrepreneurs.
He also added, "We, in the Bar Association and through the team that will undertake this initiative and with the participation of staff in the Board of Directors, will be supportive of this initiative and we will be confident that the success of this initiative will only be through pressure groups. As well as through a voice emanating from the initiators and project owners until we achieve the difficult equation, we will be a voice heard by the political leadership and the executive and legislative authority, which must adopt qualitative projects that advance economic work."
He continued, "It is not possible to imagine a country without an economy, investors or initiators, as well as small projects implemented by young men and women looking to start their working and professional lives. Therefore, we believe that the initiative in the next time, when the voice of those speaking for this initiative reaches the street and the Kuwaiti media, there will be real interest, especially since there is a certain group that monitors and follows up on those distinguished initiatives that discuss a specific issue. Our insistence on continuing any initiative that will achieve the desired results and successes, whether the project is successful or stumbled. There is no doubt that the idea is qualitative and only mature minds adopt it, and we always say great opportunities need prepared minds. Therefore, we call on every initiator to adopt this initiative so that we can implement this initiative on the ground”.
Step on the right course
For her part, the head of the Investment and Business Laws Review Committee, Lina Adlouni, said that economic studies confirmed that the Corona pandemic contributed to providing job opportunities of different shapes and sizes. Referring that small and medium enterprises are initiatives undertaken by individuals that turn into economic entities, whether companies, organizations, commercial or industrial projects. Hence, it is necessary to provide means for the development of small enterprises in order to strengthen the economy, and we are working to support the initiators through concerted efforts, whether from the efforts of initiators, government agencies, or civil society agencies, to encourage this group to work in the market and achieve its goals. And if there are obstacles, time will tackle them.
She also added, “There is no doubt that the initiative to establish a stock exchange to promote small and medium enterprises is a first step on the right course, and I see that the initiative is new of its kind and will achieve its goals soon.”
The stock exchange creates new liquidity
For his part, entrepreneur Abdullah Al Jouan said that the capital markets in general, before classifying them, are mainly aimed at creating liquidity, which reflects positively on the improvement in the performance of the economy, and since it is customary to divide and classify the markets in Kuwait into a primary market and other markets. In addition, the types of markets vary according to the liquidity of the stock itself, whether issued or available shares. In addition to the existence of certain requirements for the inclusion of this type of company in the stock exchange.
Al Jouan said that with the development of economies and the diversification of legal entities, and there is a need to create secondary markets, which will help in revitalizing the economic cycle in the country that depends on entities.
He also added, the markets are no longer only for companies, but include commodities and bonds. There is no doubt that there are emerging companies, but they are no longer able to exist for trading.
He pointed out the importance of having multiple markets, especially for emerging markets, where their objectives must be profitable, have businesses and generate revenues. Therefore, I see that the initiative presented by lawyer Areej Hamada will achieve many benefits, boost the economy, create liquidity, and support owners of small and medium enterprises.
Investing in an ambitious generation
In turn, the rapporteur of the Investment and Business Laws Review Committee at the Kuwait Bar Association, Almas Bouqmaz, said that investing in the energy of young people and trusting their abilities opens the doors of achievement and construction. She referred to the keenness of the Kuwait Bar Association to shed light on the investment sector, not only to encourage them, but also to enable them to build projects and also protect them in the future.
Bouqmaz stated that she believes in investing in an ambitious generation that always seeks to create projects that help build society and increase productivity. During the symposium, she reviewed the reasons for its introduction, its mechanism of action, and the role that the relevant authorities will play in activating its articles and implementing it on the ground.
Attracting investors to projects
For her part, the Head of the Business Women Network, Bodour Al Sumait, said that owners of small projects should attract investors to enter into their projects if the projects stumbled due to special circumstances, but it was successful. She pointed out that the successful project will be attractive to the investor, as the presence of the investor helps to quickly overcome stumbling and strengthen the project entity by expanding or increasing products and adding a new product or production or exporting due to the presence of an investor who helped increase the capital.
About the importance of the entry of investors as partners in small and medium enterprises, she said that the entry of investors is important for several parties, whether for the owner of the project, which may strengthen his financial position by expansion or development. As well as the investor, who will be able to invest his static money and convert it into an operational one that will return to him with revenues.
Al Sumait reviewed the controls and standards for the inclusion of small and medium companies in the public capital markets, as she considered that it must meet the requirements for listing, which are set by the founders of the Small and Medium Enterprises Exchange, as it differs from the basic listing. As for the current conditions of the Kuwait Stock Exchange, it is that the value of the company is estimated at 15 million Kuwaiti Dinars as a minimum. The company must have at least 450 shareholders, each of whom owns shares worth at least 5,000 dinars, or 225 shareholders, each of whom owns shares that are worth 10,000 dinars.
Furthermore, Al Sumait touched on the criteria and controls for determining the market value of a small and medium project or idea, as she considered that the market value of the project should be determined according to the value of the due or future assets and obligations on the project. As well as the expected rights and profits, by calculating the value of the project's assets, current profits, and expected liabilities.
About the possibility of including creative ideas in this type of market, so that the investor is the full financier of this project, she emphasized the possibility of making partnerships between the owner of the ideas and the investor to enable the ideas to be converted into a profit-generating project. As well as to be entered into the Small and Medium Enterprises Exchange, after studying and knowing the market need for the project and idea.
Alternative Financing Opportunities
For his part, entrepreneur Tariq Al Jassem stressed the need to find alternative opportunities to finance start-ups or faltering projects and at the same time build a platform that gives successful projects the opportunity to sell or exit from their companies in order to strengthen and revitalize the field of small projects, especially after Corona. He also pointed out that the importance of building a market for small projects, which will increase the importance and seriousness of using and relying on the accounting profession as a primary means of evaluating the price of project stocks.