Emirates NBD has launched a social network for entrepreneurs, as Dubai's biggest bank makes a Dh2 billion bet on the UAE's small businesses.
The bank hopes to draw in new customers with the launch of Rise, a social network that is best described as an equivalent to Facebook for small business owners.
"We want to be a bank that's a catalyst for fuelling the growth of the SME sector in the UAE," said Vikas Thapar, the Emirates NBD head of business banking.
It added 2,500 new small companies as customers during the first four months of the year and has earmarked Dh2bn in fresh lending to small businesses as one of its strategic initiatives for the year.
The bank has increased its SME lending year-on-year by 30 per cent for the past two years.
The bank also intends to launch a fund alongside the Mohammed bin Rashid Establishment for SME Development as it teams up with the Government to improve access to credit for entrepreneurs.
Small business are widely regarded as the motor of economic growth and employment and are viewed by many economists as a means of alleviating the Middle East's chronic youth unemployment. However, their access to credit is generally poor.
The UAE is home to some 230,000 small businesses, which account for 40 per cent of the Emirates' GDP and employ a similar amount of its workers, Emirates NBD said, citing government statistics.
With the new Rise website, business owners are able to log on and browse "a wealth of industry knowledge and expertise" including research on their sector, events and conferences and case studies of successful small companies, Mr Thapar said.
Rise follows in the footsteps of Pi Slice, a Dubai-based company that raises capital through social networks in a manner similar to Indiegogo or Kickstarter, and invests in small businesses in the Palestinian Territories, Lebanon, Egypt and Iraq.
"We live in a connected world today, where success is no longer defined in isolation," Mr Thapar added. "This initiative embodies the connected world of SMEs where a small-business owner only has to reach out to Rise, to link to a wealth of industry knowledge and assistance."
With project finance spending expected to surge in the year ahead, banks are betting on large amounts of business from the ancillary firms that will support big government-backed companies.
Doha Bank said it would expect to spend significant sums on funding small businesses as part of US$1.5 billion earmarked for lending in the UAE.
"Doha Bank sees significant organic opportunities, without external stimulus involved in the SME market which plays a pivotal role in the non-oil economy," said R Seetharaman, the bank's chief executive.
The bank said it had received encouragement in targeting small business from Dubai SME, the government agency set up to help entrepreneurs gain greater access to financing.
The World Bank's Doing Business Report for 2013 found that while the UAE ranked highly on some metrics such as trading across borders, where it ranks fifth globally and registering property, where it is 12th, other key criteria point to harder trading conditions for entrepreneurs.
The UAE ranks 83rd for getting access to credit, 104th for enforcing contracts and 22nd for starting a business overall, the report found.
The Ministry of Finance hopes that the creation of the Al Etihad Credit Bureau will ease access to credit for entrepreneurs as banks are able to better assess customer creditworthiness, with full credit scoring expected to be available by next year.
The credit bureau is due to begin trials in July.