Small and medium-sized enterprises continue to suffer from lack of financing from banks, according to Abdul Aziz Al Ghurair, the chairman of the UAE Banks Federation.
“It is clear that there is a need for the financial sector to facilitate more effective SME-bank relationships through awareness initiatives that will enable companies to successfully secure the external financial support they need,” Mr Al Ghurair, who is also the chief executive of Mashreq, told a meeting of more than 100 business owners and the banking federation on Sunday.
"SMEs are the backbone of any country's economic framework, so it is of the utmost importance that they receive adequate support in turning their entrepreneurial vision into a successful business proposition."
SMEs make up 90 per cent of registered companies in the country and authorities have been banking on small businesses to bolster economic growth at a time when the hydrocarbon industry is in the doldrums on account of low oil prices.
This segment has not been untouched by the resultant economic fallout and many small business owners skipped town at the height of the drop in oil prices in 2015, leaving what was estimated to be Dh5 billion in unpaid debts.
That has also made lenders more hesitant to stump up fresh cash.
Last year, an initiative among local banks to bail out SMEs helped to restructure some Dh7bn of debt owed by more than 1,700 companies.
A bankruptcy law was also approved last year, giving business owners more of an incentive to stay and solve their financial problems. Among other things, the bankruptcy law will put a moratorium on sending people to jail for bounced cheques until a restructuring plan for business owners has been agreed with creditors.
“SMEs face several challenges when trying to identify financing resources, and our initiative today, held in collaboration with the UAE Banks Federation, aims to target these challenges by offering a dedicated platform to fuel a solid discussion among entrepreneurs an d banks,” said Sanad Al Meqbali, the chairman of the Emirati Entrepreneurs Association.
“The open dialogue is aimed at facilitating stronger communication and collaboration channels for the benefit of all involved.”
mkassem@thenational.ae
__________________________________
More SMEs coverage
Mona Al Marzooqi / The National
■ Dubai SME ranking system can speed up payments
■ UAE's global top spot in smartphone use gives local SMEs huge opportunities
■ Year in review: SMEs were the engines of the UAE economy in 2016
■ Dubai ruler issues amendments to SME law to aid development
■ Comment: Lend a little and be good to the UAE economy
__________________________________
Follow The National's Business section on Twitter
