Middle East: Can the crowd fund Gulf SMEs?
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Middle East: Can the crowd fund Gulf SMEs?

Beehive and Eureeca are using online crowdfunding to raise debt and equity for small businesses in the Middle East. Becoming regulated will allow them to grow rapidly. In time, they could eat the banks’ lunch, or the banks just might swallow them.



Rick Pudner is well aware of the problems small Emirati firms face during periods of economic turmoil. And he blames bank lenders for making matters even worse.

Over morning coffee in the heart of Dubai’s financial centre, Pudner, the former head of Emirates NBD, tells Euromoney about the way banks function in the United Arab Emirates. “The traditional methodology here,” he says, “is, basically, you give a loan to a company and you take a series of post-dated cheques as guarantees. When the company doesn’t pay back, you present the cheques, the cheques bounce and – because it’s a criminal offence – you get the guy arrested. Now the guy is in jail. How’s he going to work out his problem?”

Because of that, Pudner says: “You get people who just zip off. My neighbour last year – one minute he was there, the next where is he gone? Back to India.” The neighbour was an entrepreneur whose small firm went bust, Pudner says. Like so many other foreign businessmen working in the UAE, he chose to flee rather than face the threat of imprisonment. 

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