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UBF & EEA address challenges and explore growth of the SME sector at an open discussion


Transparent SME-bank relationship key to nurturing healthy entrepreneurship environment in UAE

Aimed as an open platform for UAE entrepreneurs to bring to light key finance challenges facing SMEs and explore ways to support them to grow their businesses – the ‘Entrepreneurs and Banks’ event hosted by Emirati Entrepreneurs Association (EEA), in partnership with the UAE Banks Federation (UBF) concluded today.

The highly-anticipated gathering, brought together more than 100 Emirati entrepreneurs and senior officials from the banking industry, was chaired by H.E. Abdul Aziz Al Ghurair, Chairman of UBF, who addressed all the concerns raised by the Entrepreneurs and offered guidance and advices on best practices to follow, in order to increase their access to finance, and to help them execute their development strategies and achieve their business objectives.

Acknowledging the importance of a healthy entrepreneurial sector in the UAE, H.E Al Ghurair highlighted that while SMEs form around 90% of the total number of registered companies in the UAE, a major portion remains to have limited access to finance.

A number of recurring themes surfaced from the discussions with the participating entrepreneurs like absence of an organizational governance structure, in addition to the lack of appropriate training opportunities, innovation capabilities and business experience.
Challenges associated with cash flow and pricing policies, limited access to technology, insufficient knowledge of the industry and market and failure to secure effective negotiations with external stakeholders were also identified as roadblocks.

With limited access to finance identified as a top challenge for SMEs and entrepreneurs, the discussions drew attention to reasons behind it which helped applicants better understand the screening process. Top reasons included: high operational costs, insufficient securities and credit records, inaccurate financial statements, lack of continuity and expertise, weak governance and low potential for financial independence.

Offering constructive advice to the participants, H.E. Al Ghurair noted: “It is clear that there is a need for the financial sector to facilitate more effective SME-bank relationships through awareness initiatives that will enable companies to successfully secure the external financial support they need.”

H.E Al Ghurair added: “For SMEs to secure finance from banks, they first need to recognize market needs and the available investment opportunities. It is also crucial that they focus on a diverse service portfolio and not limit the scope of their business to only a few activities. Creativity is another important element for SMEs to cut through the clutter and stand out from the competition by continuously building their internal capabilities and competencies.”

 “SMEs are the backbone of any country’s economic framework, so it is of the utmost importance that they receive adequate support in turning their entrepreneurial vision into a successful business proposition. A number of banks initiatives are already in place to support them financially, and the latest of which was the UBF’s Modus Operandi – a dedicated program for financially-troubled companies, amongst others. We urge entrepreneurs start-ups to take advantage of the resources available to them to avoid hindrances that may slowdown the process of setting up their businesses,” H.E Al Ghurair concluded.

Sanad Al Meqbali, Chairman of Emirati Entrepreneurs Association, said: “SMEs face several challenges when trying to identify financing resources, and our initiative today, held in collaboration with the UAE Banks Federation, aims to target these challenges by offering a dedicated platform to fuel a solid discussion among entrepreneurs and banks. The open dialogue is aimed at facilitating stronger communication and collaboration channels for the benefit of all involved.”

“Providing SMEs with the required financing serves as an impetus to encourage innovation and proactivity among entrepreneurs, which can be further strengthened by extending all the support they need through co-ordination with the concerned parties, to help secure their sustainable growth and continuity,” he added.

The session was moderated by Jassim Al Bastaki, Secretary General, Emirati Entrepreneurs Association, who addressed the audience and thanked H.E. Abdul Aziz Al Ghurair, Chairman of UBF, for offering advices and guidance to aspiring entrepreneurs, which stemmed from his extensive experience in the business field and the banking sector, and which today contributes towards raising greater awareness among entrepreneurs and motivates them to develop their skills and abilities.

Al Bastaki pointed out that SMEs represent one of the main economic pillars of a nation, and their role and contribution in achieving a country’s economic and social objectives are widely recognized around the globe. He added: “The relationship between banks and SMEs, with respect to financing, is currently facing a number of challenges, and is directly linked with the securities provided, the repayment periods, and the development of a financing service to meet the needs of the SME sector and support its long-term growth.”

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