Alkesh Sharma / Emirates Business
In 2014-15, the UAE registered its best economic performance in 44 years by growing its Gross Domestic Product (GDP) to AED1.47 trillion, thanks to 60 percent contribution from the SME sector. Small and Medium Enterprises (SMEs) have clearly emerged as the lifeline of UAE economy.
Giving a major boost to this sector, Emirates’ financial institutions, including major banks, are supporting SMEs and entrepreneurs in a big way. Right from providing initial incubation services to offering mentoring, infrastructure and easy loans, these organisations are contributing their bit.
In one such latest commitment, Emirates Development Bank (EDB) has pledged a combination of expert business and financial advice, with products designed specifically to help local entrepreneurs and businesses.
“Comprising of around 300,000 companies and accounting for 86 percent of the workforce in the private sector, SMEs play a critical role in the UAE economy. With more challenging economic conditions, it has never been more important to support this sector, which is so important to the future growth and prosperity of our nation,” said Rashid Mahboob, Acting CEO of EDB.
According to the Ministry of Economy, SMEs represent almost 92 percent of the total number of companies in the UAE and provide more than 86 percent of jobs in the private sector. The growing number of successful SMEs in the Emirates is reflective of the government’s stress on economic diversification and creating a congenial environment for entrepreneurs and the start-ups.
As per a World Bank 2015 report, the UAE is ranked 58 among 189 countries on the ease-of-doing business. In the Middle East, the Emirates is clearly way ahead of other countries. “We want to send a clear message to SMEs and entrepreneurs that our door is open and we are here to help with expert advice and accessible finance,” pointed out Mahboob.
Products being developed by EDB for local businesses include an SME business loan, business accounts and strategic sector finance for qualifying clients.
In the past, banks have also played a crucial role in the success of SMEs by providing them timely capital. Under the terms of the UAE’s SME Law, banks are ensuring that at least 10 percent of their loans are directed to SMEs. The leading banks in the UAE are allocating more funds to finance SMEs projects on priority basis.
Emirates NBD caters to nearly 70,000 SMEs and have employed relationship managers for about 35,000 companies. National Bank of Abu Dhabi (NBAD) has vowed to increase investments, easy-to-use products and top-of-the-line customer service to SMEs. Banks are continuously fulfilling SMEs’ short-term working capital to medium-to-long-term financing needs for business expansion.
“Considering the hassle-free business environment and supportive banks, UAE could be the dream destination to step into the shoes of an entrepreneur. Before settling in Dubai in 2014, we explored the markets of Gurgaon (India) and Buenos Aires (Argentina) but this place is matchless. Since then it has been a dream-run for us,” Anshul Singhvi, who is running a software start-up and catering to clients in US and Finland from his Dubai office.