The UAE's Ministry of Economy is offering Emirati-owned small and medium enterprises (SMEs) Dh100 million in financial support allocated by Emirates Development Bank and a new set of services aimed at accelerating their growth following the Covid-19 pandemic.
The ministry is re-launching its National Programme for SMEs, which began in 2014, with new services including registration for the federal government's procurement tenders, business services from telecoms to internal audits, and easier access to funding, Ahmad Belhoul Al Falasi, Minister of State for Entrepreneurship and SMEs, said at a press conference on Wednesday.
The ministry has added to the programme 20 public and private sector entities, which are participating in the development of these initiatives and services, bringing the total number of partners to 25 after the re-launch on Wednesday.
"The government is very aggressive in terms of giving access to nationals opportunities that drive the economy," he told reporters. "This will definitely increase the value proposition of becoming an entrepreneur and should make it more appealing and easier to set up a business whether it comes to fees reduction or getting access to contracts or services."
SMEs are the backbone of the UAE economy, comprising 98 per cent of the total companies operating in the country and some 52 per cent of its non-oil economy.
The UAE ranks first worldwide in the latest Global Entrepreneurship Index, outperforming major global economies such as the US, the UK, Japan, Canada, South Korea and some EU countries. Last year, the Emirates was placed fourth in the GEI rankings, which are compiled by London-based researcher Global Entrepreneurship Monitor.
The number of new commercial licences registered for Emirati entrepreneurs rose to 29,000 in 2021, up 26 per cent from 2019, Faisal Al-Hammadi, assistant undersecretary for entrepreneurship and SMEs at the Ministry of Economy, said at the event.
Mr Al Falasi urged Emirati entrepreneurs to sign up for the re-launched programme that aims to boost SMEs' growth and improve market access following the pandemic.
"Entrepreneurship is not for everyone, it takes someone with patience and determination, but our role is to reduce the burden on the citizen," Mr Al Falasi said. "We cannot remove risk entirely, because entrepreneurship comes with risks, but our job is to make the process [easy] as much as we can for our entrepreneurs."
Services for Emirati entrepreneurs
The National Programme for SMEs comprises three main initiatives: government procurement, business support and financing solutions.
The Ministry of Economy renewed its partnership with the Ministry of Finance to allow Emirati entrepreneurs to register on the federal procurement programme more easily. The initial stage will involve three federal entities: the Ministry of Education, the Emirates Foundation for Health Services and the Ministry of Human Resources and Emiratisation.
The ministry signed partnerships with 13 national institutions for this initiative including Emirates Post Group, Emirates Transport, Zayed University, Emirates Integrated Telecommunications Company (du), Higher Colleges of Technology, Etihad Airways and e&, among others.
The ministry will also provide Emirati entrepreneurs with services to support their business through partnerships with the private sector. These include telecoms services in partnership with e&, accounting or internal audit services from specialised firms such as KPMG and insurance services from companies such as Daman. The Ministry of Human Resources and Emiratisation will also offer Emirati-owned SMEs reduced costs for labour recruitment.
In terms of financial support, the Emirates Development Bank has allocated financial liquidity worth Dh100m through the Sanad initiative that aims to support the recovery of Emirati SMEs affected by the Covid-19 pandemic.
"We are a bank, so we are not bailing out failing companies but accelerating the growth of national SMEs that are expanding" Ahmed Al Naqbi, chief executive of EDB, told The National on the sidelines of the conference.
The funding ranges from Dh2m for SMEs in the services sector and Dh3.5m for SMEs in the industrial sector, he said.
SME selection criteria
Emirati entrepreneurs with a valid commercial licence, regardless of the sector in which they operate, are eligible to apply for the programme, Mr Al Falasi said. Businesses with positive earnings before interest, taxes, depreciation, and amortisation during 2021 will be evaluated for access to funding from the Sanad initiative.
The ministry will assess the SMEs based on their performance in 2019 and their recovery from the pandemic in 2021. The performance during "2020 will be negated" because the figures were skewed by the crisis, officials said.
Some 3,000 local businesses have already benefitted from the National Programme for SMEs prior to its re-launch, he said.
"We want Emirati entrepreneurs to stand on their own two feet in any project," Mr Al Falasi said, although the UAE has identified priority sectors for its economy such as food security and advanced technology.