SHARJAH // Small and medium-sized enterprises (SMEs) in Sharjah that are struggling to secure loans from banks due to the credit crisis will be able to take advantage of lending packages soon to be launched. The Sharjah Chamber of Commerce and Industry (SCCI), says it is in the final stages of negotiations with banks over the new loan packages. SMEs make up to 80 per cent of Sharjah's economy, according to the chamber, and the emirate is home to about 40 per cent of the UAE's manufacturing industry, employing about 750,000 Emiratis and expatriates.
Since the global downturn reached the UAE, banks have tightened their lending policies, and the chamber believes injecting liquidity into SMEs is needed to ensure Sharjah's future growth. "We are joining hands with banks and are working on a few different programmes to provide different packages to SMEs," said Hussain al Mahmoudi, the director general of the SCCI, on the sidelines of a meeting with the International Chamber of Commerce (ICC) South Asia and Middle East regional consultative group.
Mr al Mahmoudi said there would be three packages that Sharjah-based lenders would be able to provide to SMEs, with each one co-designed and some backed by the SCCI. The chamber already provides financial assistance for firms to attend conferences and trade shows that could help them boost sales. "The work of various chambers in the region is attracting more investors and we are witnessing a shift in investment from Europe to the Middle East and South Asia," said Ahmad Belhasa, the chairman of the UAE committee of the ICC, adding that Sharjah had moved in the right direction to protect its economy.
Tariq Rungoonwala, the regional co-ordinator of the ICC, said: "SMEs are important for every country. Sharjah has stepped up and has built momentum behind it. It is a temporary measure for a critical area and Dubai [also] needs to ease credit restrictions for business. "You have to provide credit for companies that make 40 to 60 per cent of the economy." One analyst has warned that, given the tight credit market situation, many small businesses would not survive the second quarter of this year.
"The focus has been on banking and property sectors, but SMEs contribute as significantly as any other sector to the UAE's economy," said Wadah al Taha, an independent analyst based in Dubai. "Sharjah's initiative is timely and should be a lead for emirates like Dubai - or better still, something for the Federal Government to take into account." @Email:shafez@thenational.ae
