The Central Bank said that it had conducted a survey on MSMEs, that the first challenge facing this sector is the high interest rates, according to what 69% of the survey respondents said, 32% of them pay more than 10% interest on financing and may exceed that In the case of resorting to the use of credit cards,
according to the survey, "there are 3 main challenges facing the owners of this type of project, which are" high interest rates, bureaucracy and delays in approvals. "

The survey also indicated that there are 3 main reasons for the banks' refusal to grant financing, namely the lack of documents, the lack of an adequate credit record and the lack of guarantees.

The Central Bank stated that the rate of financing this sector reached at the end of last year 5.3% of the total domestic credit, which is less than the average of 8% in the countries of the Middle East and North Africa and 18% in emerging economies. "Noting" that the total lending to them at the end of 2019 amounted to 84.7 billion dirhams.

The Central said that, recognizing the need to improve the work environment of this sector and increase its banking acceptability, a high-level coordination committee was established on these projects, consisting of representatives from the Central Bank, the Ministry of Economy, the Ministry of Finance, the Ministry of State for Youth Affairs and the Ministry of Justice, along with the Federation of Emirates Banks, the Emirates Development Bank, and a company Credit Union, MSME Development Funds (Khalifa Fund and Dubai Foundation for Small and Medium Enterprises, etc.). The committee is currently working on finalizing a national strategy to enhance project financing Micro, small and medium sized and developed.

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