Small and medium-sized businesses may be going through a rough time, but they have received a vote of confidence from Emirates Development Bank.
The government lender, which gives loans only to Emiratis, said it was still committed to funding SMEs at a time when many banks are reducing their exposure to the troubled segment as defaults rise amid a slowing economy.
“Comprising of around 300,000 companies and accounting for 86 per cent of the workforce in the private sector, SMEs play a critical role in the UAE economy,” said Rashid Mahboob, acting chief executive officer of Emirates Development Bank.
“With more challenging economic conditions, it has never been more important to support this sector, which is so important to the future growth and prosperity of our nation. We want to send a clear message to SMEs and entrepreneurs that our door is open and we are here to help with expert advice and accessible finance.”
More small businesses in the UAE struggled to get loans after confidence slipped to new lows in the fourth quarter of last year, when the fall in the price of oil was most fierce, according to a survey by Gulf Finance that was released this month.
As a result these businesses, which are typically the lifeblood of an economy, reported in the survey that they are finding it more difficult to secure financing and to get paid. They are also retrenching plans for expansion and have stopped hiring.
Small businesses and individuals have been shying away from borrowing in recent quarters, and banks have also become more reluctant to lend at a time when bank deposits are dwindling amid lower government revenues from the sale of crude oil.
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