Ethnic minority businesses contribute significantly to the 海角视频 economy, generating billions in annual revenue and employing millions of people. More importantly, these businesses act as a bridge to international markets, fostering trade relationships and cultural exchange.
Supporting ethnic businesses is not just a matter of social equity but also an economic imperative. They drive innovation, create jobs, and enhance the overall competitiveness of the economy.
Yet, the lack of support for Muslim businesses in Wales, coupled with the absence of Sharia-compliant finance options, highlights a glaring gap in the entrepreneurial ecosystem.
When I investigated access to finance for SMEs for the Welsh Government twelve years ago, one of the issues raised was whether we could develop funding solutions that aligned with Sharia law, which prohibits the charging or payment of interest (riba).
This poses unique challenges for Muslim entrepreneurs in Wales, as most available funding options are interest-bearing loans, conflicting with these principles. As a result, the absence of Sharia-compliant finance limits their ability to secure funding, stifling business ambitions and excluding them from full participation in the economy.
One would have expected the Development Bank of Wales to address this issue when it was established, but that has not happened. To be fair, it reviewed the feasibility of a fully Sharia-compliant finance fund by consulting with local and London-based advisors. However, it concluded that there was insufficient market demand to justify establishing a new fund.
This is surprising given that Wales is home to approximately 67,000 Muslims. If just 1% of this population applied for loan funding each year to start a business, it would generate 50% more applications than the Development Bank currently funds annually.
Indeed, this should be a no-brainer, given that data from the Global Entrepreneurship Monitor consistently shows that non-white adults in the 海角视频 are twice as likely to start a business as their white counterparts. Indeed, only one in ten of the owners, directors or shareholders in businesses receiving a new investment from the Development Bank were ethnic minority individuals.
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Since the Muslims who form a significant part of Wales’ non-white population, the potential demand for Sharia-compliant finance is likely far higher than the development bank’s assessment suggests and the lack of financial mechanisms to support Muslim entrepreneurs not only stifles individual ambitions but also undermines the broader economic potential of Wales.
Sharia-compliant finance is not merely a religious preference, but it is a necessary framework for individuals whose faith prohibits conventional interest-based loans. By failing to provide such options, the Welsh Government - which owns the Development Bank of Wales - is effectively excluding a growing segment of the population from full participation in entrepreneurial activity.
More importantly, this limited scope does little to support ambitious Muslim founders seeking to scale their ventures and create jobs.
Fortunately, a simple solution could be implemented immediately. The British Business Bank’s Startup Loans programme has developed a clear model for Sharia-compliant funding, offering finance directly to individuals with repayments structured as a return of capital along with a predicted profit share based on the outstanding balance.
This model could be readily adapted for the development bank’s loan programmes, enabling Muslim entrepreneurs in Wales to access the funding they need without compromising their religious principles.
If this was done to enable more Muslims to start and grow businesses, Wales could unlock significant economic value, create jobs, and foster innovation. This aligns with broader goals of economic diversification and community cohesion, both of which are essential for Wales’ long-term prosperity.
Beyond financial support, there is also a pressing need for mentorship and networking opportunities tailored to the needs of Muslim entrepreneurs, many of whom face unique challenges, from cultural barriers to navigating unfamiliar regulatory environments.
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Policymakers must also consider the reputational impact of neglecting this issue. Demonstrating a commitment to inclusivity and innovation is vital for attracting investment and talent.
Wales could position itself as a leader in faith-based finance and minority entrepreneurship, but this requires a willingness to challenge the status quo, something that has been lacking in business and financial support institutions so far.
Given this, I hope the Minister for the Economy (Rebecca Evans) will now ask the Development Bank to revisit its assessment of the demand for Sharia-compliant finance and implement a programme similar to that developed by the British Business Bank. She should also ask other stakeholders, such as Business Wales, to work with the Development Bank to engage directly with minority entrepreneurs, ensuring their voices are heard in shaping economic policy.
The lack of support for Muslim businesses in Wales is a missed opportunity that undermines both economic potential and social cohesion. By addressing this gap and providing Sharia-compliant finance options, Wales can unlock new opportunities for growth, foster inclusivity, and ensure that no community is left behind in building a dynamic entrepreneurial ecosystem that helps grow the Welsh economy.