Many small and medium businesses in Bahrain need immediate financial help to save them from closure in the coming months, say business leaders.

Recent support will be helpful, but more is needed for these businesses to recover from the impact of recent events, they added.

Economist and businessman Dr Yousef Mashal said many businesses would be forced to close in the coming months because of the non-availability of cash to run their operations.

Businesses working on a 90-day credit system will be particular affected this month because the payment they should receive now based on February's sale won't be a proper income because the market was unstable at that time, he said.

The government and supporting bodies need to act now to help those businesses on the brink of collapse because loans won't be available to many small businesses, he added.

'We've seen help from banks to small and medium industries, but they will be looking for profitability,' Dr Mashal told our sister newspaper Gulf Daily News (GDN).

'The loans given to businesses will be with a high interest rate and will require proof of credentials, financial records and perhaps a guarantee.

'Unfortunately, the majority of small and medium businesses don't have audit reports on an annual basis and don't have guarantees for a loan and won't have fixed deposits or land so they won't be able to get such loans, even a small loan.'

Dr Mashal said business were going to be affected for some time and therefore proposals to help small and medium enterprises (SMEs), including talks of a government funds, needed to be implemented now.

Funds in the form of loans or soft loans should also be distributed to SMEs without the need for credentials or guarantees, he said.

'This situation is going to continue for some time and the majority affected is the small businesses because these people rent their shops and offices and put their expenses month by month,' said Dr Mashal, who is Mashal Group chief executive director.

'In a situation like this it snowballs so that even when the income starts coming in it will only cover the business for that month but not what happed two or three months ago.

'Real action needs to be taken from the government to bail out these small businesses, exactly like it bailed out big companies and banks during the global financial crises.'

BCCI contractors committee chairman Samir Nass agreed that the impact on SMEs due to the unrest in previous months was now starting to appear for those working on a 90-day credit system.

He said that the BCCI had last month set aside an aid package of BD300,000 to help small and medium businesses that were members and the board was studying the mechanism of how to distribute the funds and who should benefit.

Concerns over government delays in payments to businesses had been raised by the BCCI to authorities and were being addressed, he said.

'There are efforts by the government to release payments faster than normal to reduce the impact,' said Nass.

'There are problems and the government is doing the best it can, but the extent of the problem we don't know.'

Lion Construction Establishment general manager and spokesman for SMEs affected by the financial crises Hisham Mattar said businesses welcomed the decision to suspend for six months the monthly fee levied by the Labour Market Regulatory Authority (LMRA) on each foreign worker from April 1.

However, he said SMEs required much more financial help and support following the global financial crises, the LMRA fees and the impact of the recent unrest in the country.

'Things have been going from bad to worse and a lot of businesses have closed down,' said Mattar.

'Manpower has been reduced and five of my workers returned home because they were really scared.

'The hold on the LMRA fees for six months is a good step but our request is to cancel them.

'Some projects have been delayed due to the situation and people are scared to spend money, they don't want to build property.'

Mattar said SMEs were calling on the BCCI and Tamkeen for more help and 200 businessmen had sent a letter to His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Deputy Supreme Commander, informing him of their problems and requirements.

'We requested serious support from Tamkeen, avoiding different conditions and immediate support financially and requested fair tenders and reduction on utilities and the LMRA fees to be cancelled,' he said.

'So far, unfortunately, we have seen nothing and we small and medium businesses are very depressed.'

The BCCI said on Monday that dozens of Bahraini companies and traders could go bankrupt in the aftermath of the recent crisis.

It said that more than 120 Bahraini firms and businessmen had complained to the chamber about their critical situation.

Hundreds others have reportedly called the chamber, urging immediate steps to protect their business interests and find solutions so they could avert 'inevitable bankruptcy'.

The chamber has already appealed to official authorities, calling for concerted efforts to protect Bahraini businessmen's interests.

The chamber is suggesting solutions that could potentially alleviate traders' woes such as the payment of workers, bill arrears, in addition to freezing monthly rents for owners of shops.

The chamber is also lobbying banks and other financial institutions to study the possibility of putting off loan payment and other financial commitments.

It has mediated in the cordial settlement of nine business disputes out of court as part of efforts to avert any further damages to Bahraini firms.-TradeArabia News Service