Small and medium enterprises (SMEs) play a defining role in most economies. They represent around 90 per cent of businesses and over 50 per cent of employment worldwide, and are a core engine for job creation, economic diversification and social stability.
Understandably, the development of the SME ecosystem ranks high for most economies. This trend is expected to gain further force as 600 million jobs will be needed by the year 2030, according to World Bank estimates.
Regionally, the SME sector has grown substantially, driven by government initiatives. In the UAE alone, supporting SMEs has been a priority for the government, as part of a broader plan to diversify the economy and generate employment opportunities.
As per the Central Bank, UAE banks provided Dhs93.4bn worth of loans to SMEs during the first quarter of 2020, marking an increase of 4.3 per cent compared to Dhs89.5bn in Q4 2019. Meanwhile in Saudi Arabia, SMEs currently contribute 21 per cent to the GDP, and one of the objectives of Vision 2030 is to increase it to 35 per cent by 2030, a KPMG report states.
“Recognising the strategic importance of the SME sector, the Saudi government has launched multiple programmes to solve its recurring issues and leverage its growth potential. The Saudi Industrial Development Fund is focusing on growth of the industrial sector SMEs and has developed a business resource centre, modernisation centre and financing facilities for SMEs. The Ministry of Finance has launched the SME loan guarantee programme ‘Kafala’, to facilitate bank lending to SMEs,” the report expounds.
This story is from the November 2020 edition of Gulf Business.
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This story is from the November 2020 edition of Gulf Business.
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