Number of new Emirati businesses supported by SME initative will more than double next year

Emirati entrepreneurs in National Program for SMEs to hit 5,000 by end of 2020, up from 2,000 this year

SMEs account for nearly 95 per cent of registered businesses in the UAE. Reem Mohammed / The National

The number of small and medium-sized enterprises (SMEs) run by Emirati entrepreneurs created through a dedicated national programme is set to increase 150 per cent year-on-year by the end of next year, according to a government agency.

The number of Emirati SMEs that have been activated via the Ministry of Economy's National Program for SMEs has reached 2,000 this year, up from 1,500 last year, according to programme director Adib Al Afifi.

“This marks an increase of 33 per cent, and the number is expected to touch 5,000 by the end of 2020,” he added.

SMEs account for 95 per cent of registered businesses in the UAE and employ a little more than half of the country's entire labour force. These businesses contribute 47 per cent of the UAE's gross domestic product and the aim is to increase this contribution to 70 per cent in the next couple of years.

At a press conference held in Dubai on Tuesday, the Ministry of Economy said a new strategic plan has been created to support entrepreneurship, which includes the creation of specialist training programmes and courses for entrepreneurs, the hosting of an SME World Summit and the establishment of a link with the European Business Network.

Some 50 training courses will be organised for more than 3,000 Emirati entrepreneurs and an expanded programme to train trainers will be put in place in various fields across the country.

“We will work towards connecting registered entrepreneurs with members of the European Business Network, which has 11,000 companies,” said Mr Al Afifi, adding that this will facilitate the exchange of information, experiences, help organise joint events and promote the opportunities to establish new business partnerships.

Last month, the programme also launched the formation of a new innovation committee, which will offer funding to help companies develop and promote new ideas.

SMEs can now apply to a 15-member committee that will select companies with the best projects across 15 sectors to provide them with financing, overseas promotions, access to major exhibitions and lower business costs, among various other incentives.

A State of SMEs survey commissioned by Dubai SME - the government agency supporting the sector - last month highlighted some of the issues faced by the sector in a report.

It found that a lack of tailored, affordable financing solutions was a big challenge, as SMEs who need external funding to grow were being charged “extremely high” interest rates - ranging between 14 per cent and 24 per cent - by lenders.

The report also found SMEs need to focus on the development of their own employees, increase sustainability initiatives and implement new technologies.