Media ININ Economy We Trust
Abu Dhabi 26-09-2019
The total bank credit extended to the UAE’s micro, small and medium enterprises reached AED 88.7 billion at the end of the first quarter of 2019, according to data documented by the UAE Central Bank.
The value of the credit obtained by this type of projects represents 11% of the total credit granted to the private sector and 5.8% of the total domestic credit provided by the banking sector in the UAE at the end of the first quarter of this year.
According to Central Bank data from December 2017 to March 2019, credit to microenterprises increased by 26.3% and remained almost constant for medium projects, while it declined by 20.1% for small projects.
As of the end of March 2019, SMEs received more than half of the bank credit granted to the SME sector, while the share of SMEs was limited to 30% and the share of microenterprises was around 16%.
The CBE stressed that micro, small and medium enterprises play a vital role in diversifying the economy and providing more job opportunities. It is therefore important to assess the current constraints on access to finance in the UAE.
The Central Bank is currently leading initiatives in cooperation with key stakeholders to ease lending restrictions on SMEs and facilitate sector development.
In addition, the Securities and Commodities Authority (SCA), in cooperation with the UAE Ministry of Economy and Capital Markets, facilitates SMEs’ access to finance for their activities by launching their own platform in the Dubai Financial Market and Abu Dhabi Securities Exchange.
The financing of SMEs will be carried out through funds, which will have the authority to raise funds for SMEs.
SMEs represent more than 94% of the total number of companies operating in the country, distributed 73% in the wholesale and retail trade sector, 16% in the services sector and 11% in the industrial sector.
According to the Ministry of Economy, the number of companies classified as SMEs in the country exceeds 350,000, providing jobs for over 86% of the total workforce in the private sector and contributing more than 60% of the UAE’s GDP.
