The total amount of facilities and loans provided by banks in the UAE to small and medium-sized enterprises (SMEs) reached AED81.2 billion ($22.1 billion) by the end of the first half of 2024, according to recent data released by the Central Bank of the UAE (CBUAE). Loans to SMEs accounted for 9.5 percent of the overall cumulative balance of financial facilities extended to the commercial and industrial sectors, which totaled AED855.7 billion ($232.9 billion) as of June.
Importance of SMEs
The SME sector, WAM reported, represents over 95 percent of all businesses operating in the country and employs approximately 86 percent of the private sector workforce.
Strategic collaboration at Gitex Global 2024
During Gitex Global 2024, recently held in Dubai, the Dubai Department of Economy and Tourism (DET) established a partnership with Network International, a leading facilitator of digital commerce in the Middle East and Africa. This collaboration aims to enhance Dubai’s digital economy and support the growth of SMEs and fintech companies within the emirate.
Enhancing digital payment infrastructure
The agreement is designed to improve Dubai’s digital payment infrastructure, offering better access to financing and payment solutions for businesses. This initiative aligns with the Dubai Economic Agenda, D33, which aims to double the size of the city’s economy by 2033 and increase economic productivity by 50 percent through innovation and digital transformation. Moreover, the partnership seeks to reinforce Dubai’s position as a top global city for both business and leisure, making it an attractive and rapidly expanding hub for multinational corporations (MNCs), SMEs, and Emirati entrepreneurs.
The Memorandum of Understanding (MoU) was signed by H.E. Helal Saeed Almarri, director general of DET, and Nandan Mer, group CEO of Network International. The signing was conducted by Hadi Badri, CEO of Dubai Economic Development Corporation (DEDC), and Jamal Al Nassai, group managing director for Merchant Services in the Middle East and North Africa (MENA) at Network International.
Improving access to capital
Recognizing the vital role of SMEs and fintech in Dubai’s economic growth, DET and Network International will leverage their expertise to launch initiatives that improve access to capital and innovative financial technologies for SMEs. This includes customized loan programs and grants developed in collaboration with financial institutions to foster business expansion and innovation. The partnership will also provide digital payment solutions at competitive rates for micro and startup enterprises. Advanced digital payment systems and e-commerce platforms will be established to help Dubai-based SMEs expand their market presence both locally and internationally, enhancing their competitiveness and growth potential. Additional support will include preferential payment solutions designed to ease the financial challenges faced by emerging businesses.
Fostering a fintech ecosystem
DET and Network International will work together to foster a fintech startup ecosystem that delivers crucial support, including market access, customer connections, mentorship, and the facilitation of seed and growth capital through a public-private partnership approach. Additionally, they will explore the development of a fintech solution for micro-lending that leverages data from point-of-sale transactions and banking information to simplify the customer onboarding process and improve credit risk evaluations for SMEs.
ADGM’s MoU with Zand Bank
Moreover, in February 2023, Abu Dhabi Global Market (ADGM) and Zand Bank, the UAE’s first all-digital bank licensed by the UAE Central Bank, signed a memorandum of understanding (MoU) focused on offering preferential banking services to ADGM-licensed entities, including SMEs, virtual asset companies, funds, and corporations.
Supporting Emirati employment
The agreement stipulates that ADGM and Zand Bank will also support the employment of Emiratis and provide finance training programs, SME financing platforms, a FinTech sandbox, and corporate innovation initiatives.
Read more: UAE’s Ministry of Economy launches initiative to attract SMEs to the country
Rising company registrations
ADGM has further seen a surge in company registrations, driven by the government’s business-friendly policies, as noted by Al Mheiri in November 2022. Over 1,000 companies established operations in the center during the first half of last year.
Initiative by The Entrepreneurial Nation
In September 2022, the UAE Ministry of Economy, represented by The Entrepreneurial Nation, partnered with seed and early-stage venture capital firm Flat6labs to launch a new initiative aimed at attracting SMEs to the UAE.
Supporting entrepreneurs
The two organizations signed a memorandum of understanding (MoU) to support the ‘Flat6lab Ignite’ program, providing training sessions, initial funding of AED550,000, and additional benefits from The Entrepreneurial Nation for the selected winners based on specific criteria.
Incentives for participation
According to the MoU, several incentives have been made available to companies participating in The Entrepreneurial Nation program, including two golden tickets for winners to attend a four-day training session at Flat6Labs’ headquarters in Abu Dhabi.
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