Dubai SME launches SME Friendliness Index to enable banks realise AED6b SME financing opportunity

Dubai SME, the agency of the Department of Economic Development mandated to develop the small and medium enterprises (SME) sector, has launched the ‘SME Friendliness Index’ to enable banks access 230,000 SMEs in the UAE and realise the AED6 billion SME financing revenue opportunity.

The index is based upon a six-month landmark research that requested over 30,000 SMEs for their feedback, engaged with 487 SMEs, and 21 banks. The research involved interviews, questionnaire responses, and mystery shopping.   

The SME Friendliness Index is a signaling tool that gives constructive feedback to banks about how their SME strategies are actually working. Banks know the satisfaction of their customers with reference to their competitors and identify how their product, pricing, communication and relationship management strategy are working. The Index is accompanied with an SME Tool Box that will enable the Banks develop their strategies to serve the SME market.

Dubai SME intends to do this study every two years to support banks who are key stakeholders in the development of the SME sector of Dubai and UAE.

Given the challenges and opportunities of the SME sector, the study maps the strategies of the different banks – in terms of the sizes of customers they serve, the quality of financial reports they accept, and the informal/formal nature of the SME management. The findings also indicate that despite the structural challenges, innovation is widespread in the banking community.

“The ‘SME Friendliness Index is a benchmarking exercise to understand the factors that enable financial relations of banks and SMEs. This signaling exercise helps banks, the supply side, understand the SME customers, the demand side. Dubai SME will also launch a website www.bebankable.ae in September 2012. The website will help SMEs become prepared for banking. Dubai SME is engaging with the auditing community to support this initiative. Dubai SME is also seeking to reenergize the existing business mortgage register,” said Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME.

Dubai SME intends to work closely with the banks to support them use the study finding and the Friendliness indicator to realize the SME opportunity, added Al Janahi.

Dubai SME will leverage the findings of the study to create further platforms and partnerships as part of its efforts to create a vibrant ecosystem that supports local SMEs and entrepreneurs contribute to the Dubai and UAE economy.