UAE SME loan support: Empowering small and medium enterprises to drive significant contributions to the national economy

Abu Dhabi, UAE – Small and medium-sized enterprises (SMEs) in the UAE received 81.2 billion dirhams ($22.1 billion) in loans and financial facilities by the end of the first half of 2024, according to data from the Central Bank of the UAE (CBUAE). This represents 9.5 per cent of the total financial support extended to the commercial and industrial sectors, which collectively received 855.7 billion dirhams in funding by June.

SMEs play a crucial role in the UAE’s economy, accounting for over 95 per cent of all businesses and employing 86 per cent of the private sector workforce. These enterprises are vital to the nation’s economic diversification and growth, particularly as the government seeks to bolster non-oil sectors.

The UAE government actively supports SMEs through initiatives like the National SME Program, operated by the Ministry of Economy and overseen by the UAE SME Council. This programme provides businesses with access to training, technical expertise, and opportunities to participate in international exhibitions. Furthermore, SMEs benefit from preferential loans via the Emirates Development Bank, which aims to enhance their financial stability and growth potential.

The UAE SME Council is at the forefront of this support, focusing on strategic planning, policy development, and fostering sustainable economic growth for smaller businesses. By providing access to market data and facilitating networking opportunities, the council helps SMEs make informed, strategic decisions.

In a bid to further enhance access to financial services, the Abu Dhabi Department of Economic Development (ADDED) launched the SME Finance Facilitator Program in November 2023. This initiative is designed to streamline the process of opening bank accounts and securing credit for SMEs, improving their chances of long-term success. The programme also assists businesses in preparing the necessary financial documentation and building trust with financial institutions, fostering transparent communication and reducing barriers to securing capital.

Recent figures also highlight the UAE’s growing appeal to international businesses. In 2023, Asian and Australian companies contributed to a 550 per cent year-on-year increase in the number of new SMEs establishing operations in Dubai. The emirate’s international chamber reported that 104 new businesses set up operations in Dubai during the 12 months leading up to December. This surge aligns with Dubai’s ambitious goal to double its economy and solidify its standing as one of the top three global cities.

As the UAE continues to strengthen its SME ecosystem through targeted policies and financial support, these enterprises are expected to remain a vital component of the nation’s economic strategy, contributing to its ongoing diversification and global competitiveness.