More needs to be done to encourage banks and other financial institutions in the UAE to lend to small and medium enterprises (SMEs), which is a vital part of the country’s economy and a major employment generator, according to start-up owner Bahaa Fatairy, Managing Director of BR Communications FZE, a Dubai-based public relations, marketing and design consultancy.
“Access to funding has always been a major obstacle facing entrepreneurs looking to start a business or expand their existing operations,” he said. “While the UAE government has initiated programmes to promote entrepreneurship and provide funding assistance to SMEs, a lot must still be done to stimulate local lenders (i.e. banks) and offer facilities that could further boost the sector.”
Currently, Fatairy said, some banks require an SME to be in operation for two to three years and have monthly credit transactions of around AED100,000 (USD 27,211) before a loan application can ever be considered. “These criteria stifle the SME sector’s growth and limits small-scale business owners’ ability to take the entrepreneurial journey.”