UAE's small businesses trip up when seeking funds
Financing small and medium enterprises (SME) in the UAE is still one of the main challenges facing this sector. It is hoped that the SME law which is expected to be issued before the end of this year will eliminate this obstacle, top officials said on Sunday.
During the seminar Guidelines for Enhancing SME Finance, Abdul Rahman Saif Al Ghurair, Chairman of the Dubai Chamber of Commerce and Industry, said: “Despite their integral role in Dubai’s economy many of our SME members continue to face difficulties securing financing at sustainable rates. In fact, the UAE’s total bank lending to SME’s is around 3.85 per cent, when its target is 24.3per cent, so addressing this issue has been a primary task for Dubai Chamber,”
“SMEs represent over 90 per cent of Dubai businesses and they play an essential role in building a competitive private sector and contribute significantly to employment and economic activity in Dubai and the UAE,” he said
Mohammad Al Shihi, Undersecretary of the Ministry of Economy, said: “The SME law which will hopefully be issued by the end of this year will play a major role in easing the financing for SME across the UAE.”
The final version of the SME law has been approved by the Ministerial Committee and will be shift to the Federal National Council for the final decision, he added.
Moreover, Al Shihi also criticised the financial institution for their financing policy focusing on the big corporate only leaving no attention for SMEs.
He said: “Unfortunately, the banks’ focus on big loans for big corporations is also affecting Government efforts to encourage private business as a step towards reducing unemployment among Emiratis.”
“SMEs contribution in the Dubai gross domestic production is estimated by 40-46 per cent which it represents more than 60 per cent of the UAE.”
SMEs host the majority of employment opportunities in Dubai and the UAE, and that these enterprises provide 86 per cent of the employment in the private sector, Al Shihi added.
“The Ministry of Economy is aware of the immense potential and contribution of SMEs to national growth and is making all the effort to support this sector.”