A new company is attempting to help bridge a US$3.5 billion (Dh12.85bn) funding gap for the Middle East's poorest entrepreneurs by linking them to microcredit loans bankrolled by the social media generation.
Pi Slice, a start-up based in Dubai, intends to serve as a platform for individuals and companies seeking to raise capital through crowdfunding.
This method is similar to that used by websites such as Kickstarter, but in Pi Slice's case it is aimed at supporting Palestinian farmers and providing jobs for the region's unemployed youth.
The company, founded by the former banker Genny Ghanimeh, aims to help provide greater access to finance for an estimated 3 million households eligible for microfinancing that do not currently receive it.
"Our ambition is to be the first online microfinance bank in the Middle East and the mentor of choice for every young social entrepreneur in the region," said Ms Ghanimeh. The company launched its Web-based funding platform yesterday, a date known as "Pi day" in reference to the mathematical symbol. Ms Ghanimeh said the firm intended to register with the Dubai International Financial Centre.
She said she got the idea during a trek on Tanzania's Mount Kilimanjaro, where she realised that donating $250 to her guide would support the growth of his business and allow his daughter to go to school.
Investors' funds are guaranteed by partner institutions in Lebanon, Jordan, Palestine and Iraq. The company plans to expand to Egypt, Yemen, Morocco and Tunisia.
Typically, microfinance loans range between a few hundred to a few thousand dollars and bear an average annual interest rate of 25 per cent, said David Langlois, the chief operating officer of Microworld, an arm of the Paris-based non-profit organisation Planet Finance, which supports microfinance firms.
"What we're looking for is setting up local initiatives to direct local investors and support local projects that make sense for them," he said.
The firm's focus on channelling investment within the Mena region could help to bridge a funding gap normally filled by non-governmental organisations, said Anwar Abu Sbaitan, the chief executive at Rasmala Investment Bank. "I've seen an exodus of Arab capital from the West back into the region ... A lot of money is waiting to fund such projects."
The Mena region has "the lowest access to finance in the world...", said Heather Henyon, a managing partner of Balthazar Capital and formerly general manager of Grameen-Jameel, the microfinance firm pioneered by Muhammad Yunus, the Bangladeshi Nobel laureate.
ghunter@thenational.ae
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
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