More than half of all start-up founders in the Middle East and North Africa said securing finance for their businesses was the top cause of stress in their entrepreneurial journey, according to a report.
The Covid-19 pandemic and business scale-up were the second joint reasons for stress, each voted by 33.7% of entrepreneurs. Work-life balance was highlighted by 27.4% of founders, while company formation was selected by 26.3% as a stressor, followed by team management at 18.9 %.
The research report was compiled by the Wamda entrepreneurship ecosystem, Microsoft for Start-ups and the United Arab Emirates-based digital media agency EMPWR.
The study interviewed 101 start-ups in the Mena region, including 50% in the United Arab Emirates.
Developing a start-up ecosystem and supporting small and medium-sized enterprises are key elements of the UAE’s economic development agenda. The government, both at the federal and emirate levels, has put in place programs, including initiatives to facilitate access to finance to support new businesses.
Total funding raised by Mena-region start-ups rose 64% in the first half of the year to $ 1.2 billion, according to a report from the data platform Magnit. The UAE has led the way in terms of number of deals, with its start-ups accounting for 61% of all investments in Mena, according to the report.
The SME sector in the UAE accounted for 94% of all businesses and employed over 86% of the private sector workforce at the end of 2019, according to data from the Ministry of the Economy. In Dubai, the trade and commerce hub of the Middle East, small businesses make up around 95% of all businesses, account for 42% of jobs in the emirate and contribute 40% of Dubai’s gross domestic product, according to Dubai SME. estimates.
However, despite the growing interest of angel investors and venture capitalists in funding promising start-ups, many entrepreneurs are living well below their means to finance their businesses, resulting in increased stress. Start-up founders are twice as likely to develop depression issues, EMPWR said in a statement Thursday.
More than half of all start-up founders ranked mental wellness as one of their top five concerns. Other problems include business growth (72.6%), financial problems (68.4%), family problems (37.9%) and physical health (31.6%), according to the report.
According to the Institute for Health Metrics and Evaluation, only 2% of health budgets in the Mena region are currently spent on mental health.
Coupled with the impact of the Covid-19 pandemic on young entrepreneurs, this could lead to an economic burden of $ 1,000 billion by 2030, according to the report.
About 36% of start-up founders in the Mena region rate their mental health as bad, while only 9.9% rate it as good, according to the report.
Almost 44.2 percent of respondents reported spending more than two hours per week trying to relax.
There is a critical need for accessible and affordable mental health services that specifically target entrepreneurs, according to the EMPWR report.
However, a good relationship between the co-founders can help start-ups better manage the headwinds of the pandemic. More than 95% of entrepreneurs view co-founders as family and / or friends, according to the report.
“It has been fascinating to witness the impact of the relationships between start-up co-founders and their companies in the aftermath of the global pandemic,” said Ally Salama, CEO of EMPWR.
“Many have described their relationships with such partners and cohorts as being closer to family. We found that entrepreneurs working in teams were more likely to have a stronger sense of well-being and to experience less loneliness.
EMPWR is working to launch a network to provide youth in the Mena region with a resource for peer support and mental health. This is an attempt to increase conversations about mental well-being among young people in the region, according to the statement.
“Twenty-eight percent of the population of the Middle East is between 15 and 29 years old. Mental health issues are prevalent among them, but less than half are willing to seek help, due to cultural stigma and stereotypes, ”said Mr. Salama.
The initiative is an attempt to bring the conversation around the issue, so that “this silent epidemic can be dealt with,” he said.
Update: September 10, 2021, 4:30 a.m.