Emirati banks provided a total of AED93.4 billion ($25.43 billion) loans to small and medium-sized enterprises (SMEs) in the first quarter of 2020, an increase of AED3.9 billion or 4.3 percent compared to AED89.5 billion in the fourth quarter of 2019, a report said.
The loans accounted for some 8.1 percent of the cumulative balance of credit facilities given to all private sector economic and commercial activities in the first quarter of 2020, which amounted to AED1.149 trillion, a Wam news agecny report said quoting the Central Bank of the UAE’s statistics.
Supporting SMEs is a priority of the federal government, as part of its policy to diversify the national economy and generate employment opportunities.
In light of this, the past period witnessed intense official and private efforts to support SMEs and enable them to overcome their challenges and obstacles.
Recently, a committee was formed that includes representatives of the Central Bank of the UAE, the Ministries of Economy, Finance, Youth Affairs and Justice, in addition to the UAE Banks Federation, the Emirates Development Bank, the Al Etihad Credit Bureau, SME development funds, the Khalifa Fund, and Dubai SME. The committee is in charge of drafting a national strategy that aims to provide financing for SMEs and ensure their development.
SMEs represent over 94 percent of all companies operating in the country, with 73 percent operating in the wholesale and retail sector, 16 percent in the services sector, and 11 percent in the industry sector, as per data from the Ministry of Economy.
The number of companies classified as SMEs is over 350,000, and studies conducted by relevant authorities, including the Ministry of Economy, note that they employ over 86 percent of the labour force in the private sector and make up over 60 percent of GDP.