Passing the torch

When Yusuf Khalil Almoayyed decided in 1940 to abandon Bahrain’s ailing pearl industry and start a small electrical business, he already had one eye on giving back. “He used to make a very small profit – like BD100 [about $265],” says his daughter Mona Almoayyed, “and he’d take three per cent of that and give it to my mother to distribute to the poor. That’s something he did all his life.”

It is a philanthropic tradition that continues today, albeit on a grander scale. As one of Bahrain’s oldest family-owned businesses, YK Almoayyed & Sons’ portfolio now stretches from cars to construction, powered by an 8,000-strong workforce. The company gives 3 per cent of its annual net profit and hundreds of hours of time volunteered by its employees to charitable causes, making philanthropy a cornerstone of its business model.

In 2013, it formalised its donations with the establishment of the Yusuf & Aysha Almoayyed Charity – named after their parents, explains Mona – which has become a platform for aiding underprivileged people in Bahrain, and beyond. Focus areas include education, healthcare and elderly welfare, backed by a roughly $1m annual budget.

“It’s a culture we try to build among our employees,” she says. “If you’re brought up with this approach, you’ll always give back to society. The principle is just to help others.”

In this, Mona is a case in point. As a child, her parents’ philanthropy was a quiet constant, which swelled in lockstep with the family’s success. In the early days, her mother would buy schoolbooks or air conditioning units for impoverished local families.

“She was very popular in the community,” says Mona. “They would come to her house and she would take care of their children. They were very simple in those days.”

Over time, this approach grew to include sizeable donations to community projects. The family funded a drug and alcohol rehabilitation unit in Bahrain, a nephrology and renal transplant centre, and gifted BD1m ($2.65m) to support a local kidney dialysis unit. A $2m plan to build a retirement centre to serve the elderly is currently underway.

“My father always encouraged us to care about those less fortunate than us. He would never say no to anyone who needed something,” explains Mona.

As one of six siblings, Mona's father broke with tradition, first in sending both his sons and daughters to university in Europe, and then in encouraging them all to join the family business. In 2001, when Mona took over as managing director, she became one of just a handful of women in the GCC to oversee a family-owned firm. A year earlier, she was named the first Bahraini woman to be elected to the board of a listed firm – the local conglomerate BMMI – a role that overlaps today with seats on multiple charitable boards.

Company philanthropy aside, she gives at least 5 per cent of her personal income to charity, blending support for domestic nonprofits with donations to global aid actors such as UNHCR and the UN children’s agency.

“I really do feel the private sector has a responsibility towards society to help,” she explains, “we have such wealth in this country. We don’t pay tax, and the government helps us, so in turn we have to give back.”

Broadly, GCC family businesses do. Representing 90 per cent of the Gulf’s private sector economy, these firms are major actors in the philanthropy space, and a trove of grants and donations for local charities.

The region’s 100 largest family businesses represent at least $7bn in annual philanthropic capital, according to global consultancy Strategy&, but its impact is blunted by a reliance on unplanned, ad hoc giving.

Unlocking this sector’s potential requires a swing towards development-led philanthropy, and away from simple charity.

“I believe in not just handing money to those who need it," says Mona. "Instead of giving them fish, we should teach them how to fish."

In particular, she believes in the transformative power of microlending: or the practice of giving tiny unsecured loans to the poor so they can launch income-generating businesses and help lift themselves out of poverty.

Globally, some 2.5 billion adults don’t have access to a bank account, curbing their ability to send, save and borrow money, and to cushion against financial shocks. For the unbanked, microlending – which allows the extension of credit without collateral – can be a gateway to formal financial services.

This is the idea behind Ebdaa Microfinance Bank, of which Mona is chairman and YKL & Sons a shareholder. Ebdaa offers small loans to low-income Bahrainis, starting from $530 up to $13,263, with no guarantee required and low interest on repayments.

Since its inception in 2009, the bank, which was seeded by the Saudi Arabia-based Arab Gulf Program for Development, has served more than 9,500 borrowers, lending in excess of $29m. Of those, 5,000 are women.

Customers include small local ventures seeking finance to expand and a cottage industry of women-owned businesses. The success stories are many.

“One lady started from nothing. She borrowed BD300 ($796) and now she has three shops selling spices,” she explains. “Another borrowed BD2,000 ($5,305) to start a small playgroup. She has taken three or four further loans – and paid them off – and now operates three playgroups.”

The bank claims a repayment rate close to 96 per cent and, according to Mona, expects to close a profit this year.

“Many of the people we lend to are housewives or young people, who aren’t in employment,” she says. “It’s not enough to just give people money. The goal is to support them to improve their standards.”