Emirates Development Bank Strategy provides much-needed support for the country's small and medium businesses, especially women-led businesses, which have been struggling since the pandemic.
The AED 30 billion ($8.2 billion) package of financial support for UAE’s SMEs and startups provides needed relief for the country’s businesses as they rebuild in the wake of coronavirus, industry stakeholders agreed.
Following a particularly turbulent year of lockdowns and closures during the pandemic, the Emirates Development Bank Strategy was positively received by the UAE’s SMEs and startup community.
“The initiative appears to be a very comprehensive and generous one and will be a game-changer in making the small businesses sector flourish in the form of larger employment and greater prosperity in the coming years,” said Prashant K Gulati, trustee, global board of TiE and president emeritus, TiE Dubai, an organisation which supports entrepreneurs.
“Dubai has been remarkably successful in attracting some great global talent and its entrepreneurial mindset and geographical gateway location make it the right place for such a strategy, leading to a global success story from the region underpinned by the SME and startup sector,” he continued.
Access to finance is among the most pressing challenges startups tend to face and this has been compounded by the pandemic, making this support vital to their success.
“The need for dedicated financing programs and a provision of dedicated investment funds that will support entrepreneurs, start-ups and SME’s has been required for a long time, and during the last 12 months we have seen the UAE business community raising their concerns and needs for support of this kind,” said Kellie Whitehead, Founding Partner, Female Fusion Network, an association for female entrepreneurs in the UAE.
“Barriers to growth are almost always based around access to finance and procurement opportunities and we very much look forward to seeing the benefits of both the new stimulus and also similar attention paid to other sectors,” she continued.
A recent survey of female entrepreneurs across the UAE by UN Women and NAMA – Woman Advancement Establishment indicated that female entrepreneurs especially struggled with access to finance, said Whitehead, and as such “this stimulus can go a long way to help women in the growth stage of their often ‘-micro’ businesses and SMEs looking to break through into a usually male-dominated domain”.
“Daily, we are seeing women-owned businesses struggle with access to finance options, and in the venture capital space, historically there is a legacy of under representation for female-founders,” said Whitehead.
“Any stimulus that looks to promote financial access for SME’s, at this time in particular, is a positive move and we look forward to seeing women-owned businesses be able to access this much-needed support,” she added.
The strategy, approved on Monday by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, was launched to support the recently announced Operation 300bn, “to leverage the bank’s role as a key driver of the national economy to provide the largest support network for the industrial sector”, according to a statement.
Operation 300bn was launched last month as a 10-year comprehensive strategy to more than double the industrial sector's contribution to the country's GDP, positioning the UAE as a global industrial hub by 2031.
“The UAE has announced several initiatives to support SMEs and young companies, including rebates on government fees and deposits, flexibility in visas and hiring, delays and moratorium on loans and instructing more flexibility from banks and financial institutions,” said Gulati.
“The recently announced Operation 300Bn strategy is a sign of how the whole country is gearing up to build a supportive location for the industrial sector to succeed, along with building an enabling base for smaller enterprises, which form the heart of any business ecosystem,” he continued.
While the industrial sector in the UAE is currently male-dominated, more women-owned businesses are entering this space and gaining a foothold, especially on the back of Expo 2021, explained Whitefield.
“Opportunities in 2021 are more prevalent than challenges, and stimulus’s and initiatives such as this, alongside an increased gender split at board level across private companies show that the Government of Dubai are pro-actively backing underserved sectors with increased direct financing, and this can only provide a boost to the important SME and ‘micro’ business economy as a whole,” she said.Read the full article