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Gulf donors contribute a third of non-profit Spark’s funding

People, Person, Man Tom Nicholson/Spark
Spark provides educational support, and Syrian Mohammed Mamoun is now studying telecommunications at Khawarizmi College in Amman, Jordan
  • Netherlands charity Spark supports startups in fragile Mena states
  • Has helped with 1,659 new loans for entrepreneurs since 2008
  • Donors provide connection to and vital knowledge of the region

GCC donors account for more than one-third of funding for Spark, a non-profit international development organisation that supports startups in fragile and conflict-affected countries in Mena. 

“The GCC is our second-largest source of funds owing to a mix of state donors, philanthropic foundations, charitable organisations and Zakat,” Spark’s founder and CEO, Yannick du Pont, told AGBI on the sidelines of the Dubai International Humanitarian Aid and Development Conference 2023 last week.

Spark is headquartered in Amsterdam but around 85 percent of its work focuses on supporting small but promising and ambitious startups in the Middle East and Africa.

Since it began working in the region in 2008, it has provided and/or facilitated 1,659 new loans for entrepreneurs and supported the creation of 1,437 new businesses. 

In Jordan and Lebanon alone, it has helped with more than $1.1 million in loans for entrepreneurs since 2020.

Gulf funding is playing an integral role in its work. Spark’s annual turnover currently stands at around €21 million ($22 million) – 35 percent of that is derived from GCC states, 40 percent from the EU, 20 percent from the Netherlands, and the remaining five percent is from various international organisations.   

GCC donor involvement is particularly important, explained du Pont, not just because of the money but also the networks and knowledge they bring.

“They’re more plugged in and have a stronger network in the rural areas, which helps us gain trust and access to the communities,” he said.

“In countries like Yemen and Libya, for example, if you tackle things with a Western approach, you don’t get much done.

“So, for us, it’s been amazing to work with Islamic Development Bank and Al Ghurair to create the next level of sophistication in our programming that is really culturally context-specific, while also making sure that what we do is sustainable from a business perspective.”

Today the non-profit’s funding partners from the GCC comprise seven institutions: the Saudi-headquartered Islamic Development Bank (IsDB), the UAE’s Abdullah Al Ghurair Foundation, the Qatar Fund for Development, Qatar’s Education Above All, Kuwait’s Sheikh Abdullah Al Nouri Charity Society, Kuwait’s Arab Fund for Economic and Social Development and the UAE’s Google.org.

Accessing credit has long been a hurdle for startups in the Mena region – none more so than in fragile and conflict-affected countries.

However, Spark has made it its mission to unlock the potential of Mena startups by providing financial support to young entrepreneurs in Palestine, Syria, Lebanon, Jordan, Iraq, Turkey, Tunisia and Libya. It will also be re-opening its offices in Yemen and Afghanistan this year.

Spark’s Yannick du Pont says ‘lack of VC funding is a massive issue’ in the region. Image: Spark

“I’ve seen a lot of promising startups that are expanding quite rapidly but then, because they are from refugee backgrounds, they hit a hurdle where they struggle to get a loan or access to market – particularly moving from micro to a growth-oriented SME,” said du Pont. 

“Lack of VC funding in particular is a massive issue because their ticket size is small and the risk is still high. As a result, many of them stay very small or don’t make it.”

Du Pont said Spark’s added value is in helping them bridge that gap and get ready for commercial launch.

Spark has been managing a loan-guarantee fund across eight Mena countries over the last 10 years. It is also working with the IsDB to develop a new sharia-compliant loan guarantee facility worth $23 million, under which banks extend loans to entrepreneurs that would not normally qualify for a regular loan. Moreover, the bank de-risks the loan using the guarantee fund.

“We tend to work in markets where people tell us ‘Wow, you’re early’, as the humanitarian challenges still haven’t been resolved.

“Even then, we find investors who see the opportunity – not just in terms of doing social good, but also from a business perspective.”

Du Pont said Spark’s prime focus today is on supporting entrepreneurs who want to grow their businesses in agritech and digitech.

One of the most notable regional startups that Spark has helped is FabricAID, a Lebanese social enterprise founded in 2017 by 22-year-old Omar Itani. It provides affordable clothing for Lebanon’s most marginalised and communities, including the 1.5 million Syrian refugees living there.

Today, FabricAID is Mena’s largest second-hand clothing reseller, raising raised $1.6 million in its latest funding round in January and now employs 120 people.

Gulf countries also collaborate with Spark on training programmes and educational support. Last October it joined with the Abdul Aziz Al Ghurair Refugee Education Fund and IsDB partnered to launch the new Skills Training Education Programme in Jordan and Lebanon for refugees and vulnerable youth and women.

Spark’s work across Mena since 2008
Entrepreneurs trained in business skills22,164
Scholarships awarded12,551
People who received employment placement coaching3,469
Youth matched to job opportunities3,170
Entrepreneurs/startups that received coaching/mentoring3,025
New jobs created through supported businesses2,624
Loans provided/facilitated for entrepreneurs1,659
Existing SMEs that grew1,533
New businesses created1,437

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