Noble Jose was armed with an idea and a business plan to back it, but the banks would not lend the Indian expatriate the money to fund the startup.
Debt: Lending rules' ripple effect
Dealers that dodge loan rules to go on blacklist Concerns car dealers may be finding ways to circumvent strict lending rules has prompted an Abu Dhabi bank to warn it could blacklist showrooms. Read article
Central Bank reviews rules Caps on excessive retail lending will be reviewed by the Central Bank amid worries the rules may have loopholes. Read article
Credit card use rises Shoppers across the Emirates are increasingly using credit and debit cards to pay for their goods, retailers say. Read article
Dealer defends scheme Al Futtaim Toyota says its car financing scheme is all above board and does not break any Central Bank rules Read article
[ Back to business ]
The managing director of Stratal Building Materials Trading Company, based in Abu Dhabi, instead raised the capital himself.
He is one of many entrepreneurs in the UAE who have struggled to secure credit to get their companies off the ground.
"Start-ups normally have to have their own funding," says Akram Khan, the senior vice president and group head of corporate banking for Ajman Bank. "Bank financing will only come in after there is a track record."
Expatriates seeking to start up businesses in the Emirates find funding particularly difficult to secure.
"[If] you have an Emirati [partner] who can provide collateral, then we can look at start-ups. But without collateral for expats, it's a high risk," says Mr Khan. Mr Jose's business was eventually able to get a loan after establishing a track record. He understands why banks are careful, but says they should be more flexible. "Of course there is risk involved, so there has to be a balance."
A number of initiatives have been launched to fund UAE start-ups, such as the Khalifa Fund for Enterprise Development or the Al Tomooh Scheme.
"The advantage of the Al Tomooh Scheme is that the rates are very low and the payment terms are very good," says Dr Ahmad Al Amadi, who received a Dh1 million (US$272,000) loan from the scheme to start up Advance Hearing and Balance Center in Dubai with his two business partners.
"We would have been able to start without it, but we would have taken a loan from the bank with a very hefty interest rate, so we would have been paying it off for a long time. This gives us a chance to stand on our feet."
Banks have paid the small-business sector more attention over the past six years, lured by the promise of higher returns.
"There are lots of products for these companies now," says Satyajeet Roy, the head of Citi's commercial bank for the UAE and Bahrain.
"The banks have identified the SME [small and medium enterprises] segment as a big opportunity, so obviously they are ready to play ball with them," says Mr Roy.
However, statistics on the level of debt held by small businesses in the UAE are hard to come by.
"It's very hard to say, but compared to many economies that are more evolved in SME financing, I would say the proportion would be less here and a lot of people are self-funded," says Vishnu Deuskar, the managing director of Salvus Strategic Advisors in Dubai.
Banks limit the level by restricting the debt-to-equity ratio. "Banks normally would not lend more than a debt-to-equity of one to one. So if the client is bringing Dh1m, the bank will not go beyond Dh1m," says Mr Khan.
[ gduncan@thenational.ae ]
TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
The Specs
Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now
More from Neighbourhood Watch
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
Director: Nag Ashwin
Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana
Rating: ★★★★
Herc's Adventures
Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5
RESULTS
6.30pm: Handicap (rated 100+) US$175,000 1,200m
Winner: Baccarat, William Buick (jockey), Charlie Appleby (trainer)
7.05pm: Handicap (78-94) $60,000 1,800m
Winner: Baroot, Christophe Soumillon, Mike de Kock
7.40pm: Firebreak Stakes Group 3 $200,000 1,600m
Winner: Heavy Metal, Mickael Barzalona, Salem bin Ghadayer
8.15pm: Handicap (95-108) $125,000 1,200m
Winner: Yalta, Mickael Barzalona, Salem bin Ghadayer
8.50pm: Balanchine Group 2 $200,000 1,800m
Winner: Promising Run, Pat Cosgrave, Saeed bin Suroor
9.25pm: Handicap (95-105) $125,000 1,800m
Winner: Blair House, James Doyle, Charlie Appleby
10pm: Handicap (95-105) $125,000 1,400m
Winner: Oh This Is Us, Tom Marquand, Richard Hannon
COMPANY PROFILE
Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)
Company profile
Company name: Letswork
Started: 2018
Based: Dubai
Founders: Omar Almheiri, Hamza Khan
Sector: co-working spaces
Investment stage: $2.1 million in a seed round with investors including 500 Global, The Space, DTEC Ventures and other angel investors
Number of employees: about 20
SPEC SHEET: APPLE M3 MACBOOK AIR (13")
Processor: Apple M3, 8-core CPU, up to 10-core CPU, 16-core Neural Engine
Display: 13.6-inch Liquid Retina, 2560 x 1664, 224ppi, 500 nits, True Tone, wide colour
Memory: 8/16/24GB
Storage: 256/512GB / 1/2TB
I/O: Thunderbolt 3/USB-4 (2), 3.5mm audio, Touch ID
Connectivity: Wi-Fi 6E, Bluetooth 5.3
Battery: 52.6Wh lithium-polymer, up to 18 hours, MagSafe charging
Camera: 1080p FaceTime HD
Video: Support for Apple ProRes, HDR with Dolby Vision, HDR10
Audio: 4-speaker system, wide stereo, support for Dolby Atmos, Spatial Audio and dynamic head tracking (with AirPods)
Colours: Midnight, silver, space grey, starlight
In the box: MacBook Air, 30W/35W dual-port/70w power adapter, USB-C-to-MagSafe cable, 2 Apple stickers
Price: From Dh4,599
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
The biog
Name: Capt Shadia Khasif
Position: Head of the Criminal Registration Department at Hatta police
Family: Five sons and three daughters
The first female investigator in Hatta.
Role Model: Father
She believes that there is a solution to every problem
Cinco in numbers
Dh3.7 million
The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown
46
The number, in kilograms, that Swarovski’s wedding gown weighed.
1,000
The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]
50
How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday
3,000
The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.
1.1 million
The number of followers that Michael Cinco’s Instagram account has garnered.
Scoreline
Al Wasl 1 (Caio Canedo 90+1')
Al Ain 2 (Ismail Ahmed 3', Marcus Berg 50')
Red cards: Ismail Ahmed (Al Ain) 77'
The biog:
Languages: Arabic, Farsi, Hindi, basic Russian
Favourite food: Pizza
Best food on the road: rice
Favourite colour: silver
Favourite bike: Gold Wing, Honda
Favourite biking destination: Canada