It reached 6.7 billion dirhams at the end of last December

The food industry receives the largest share of bank financing in 2020

Total industry financing for the rest of the sector reached 73.5 billion dirhams by the end of 2020. Photo: Ashok Verma

The local foodstuff industry received the largest share of the industry's funds in its various branches provided by banks during the past year, as these funds amounted to 6.7 billion dirhams at the end of last December, compared with 5.7 billion dirhams at the end of 2019, an increase of one billion dirhams.

The latest statistics of the Central Bank showed that the total industry finances for the rest of the sector, which are eight different areas, recorded a decline during the year 2020, indicating that the total at the end of last year reached 73.5 billion dirhams, compared to 80.4 billion dirhams at the end of December 2019.

An essential sector

Commenting on, the financial and economic expert, Dr. Muhammad Maher, said that the food industry is one of the essential sectors that cannot be dispensed with, indicating that despite the Corona pandemic and the accompanying closure of the atmosphere and the economy in all countries, the population of the UAE has not They feel any shortage of goods, with the support of the government and the banking sector, which provided the necessary funding for factories to expand and work at full capacity to cover various needs.

Maher explained that "the decline in financing for the rest of the industrial fields is due to the state of closure that lasted for months, and affected trade, retail, tourism and travel in various countries, and of course, the Emirates."

Least risky

Maher added: “Banks usually look for the least risky sectors when granting financing, and over the course of a year (Corona) food and medicine are the interest of people and the government, so it is natural for the food industry to witness an increase in the remaining sectors and record growth,” pointing at the same time. Until the demand for funding declined due to the shutdown.

He mentioned that after the opening of the economy and the return of commercial activities, it is expected that banks will be active in financing again in various fields of industry.

Maher indicated that the last quarter of last year witnessed a somewhat improvement in borrowing demand compared to the second and third quarters, while demand is expected to witness growth during the current year to compensate for the 2020 declines.

Support

For his part, the economist, Hammad Abdullah, said that “banks look at risks, but the field of foodstuffs was a priority and there was a request,” indicating that “the focus on this area came to reduce risks in other areas of finance, whether industrial or at the level of individual financing. And companies ».

He added that "local factories have made great efforts to help cover demand due to the closure of ports and airports, and it was natural for them to receive great support from the concerned authorities, in addition to providing funding from the banking sector."

Abdullah stated that "the market and the trade movement witnessed a retreat during the past year, as there was no demand for the clothing, petrochemical or other industries with the same strength as it was with regard to food and medicine, and this in turn was reflected in the volume of financing."

Reducing import

The economist, Hammad Abdullah, said that the UAE has strong industries in the field of foodstuffs, and there are factories in it that have a great history and name, indicating that “if banks continue to support this vital field, in addition to the agricultural sectors, it will undoubtedly reduce a lot of dependence on Import ».

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Two experts: The foodstuff industry is one of the sectors with the least risks when granting financing with the increase in demand.

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