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A huge paradigm shift in the interest of small businesses

Sami Al Riyami

reyami@emaratalyoum.comsamialreyami

April 07, 2021

There are challenges that prevent the continuation or growth of small and medium-sized companies in the Emirates, although this segment is the backbone of the economic activity of any market or economy, and the most prominent of these challenges or obstacles is the difficulty in obtaining financing, which is a major obstacle to these companies. 33% of SMEs in the UAE have unmet financing needs.

The problem of difficulty in obtaining financing is linked to other obstacles, such as limited long-term lending, as most commercial banks do not exceed seven years in the financing period, in addition to a shortage of products provided by banks for small and medium enterprises, such as financing start-ups and capital financing. The Worker.

The difficulty of the situation and the doubling of the challenges facing this type of companies due to the repercussions of the "Covid-19" pandemic, and the change that occurred during it in the direction of consumption, and the redesign of business models for companies and institutions, globally and locally, is well known to anyone.

Therefore, the UAE government focused its efforts in the next phase, in accordance with the Emirates Development Bank’s new plan, to support small and medium-sized companies, through a set of financial products, in addition to building a fertile and dynamic environment for these companies to help them advance and grow, and the bank’s role in the next phase will not be limited to lending only. Rather, it will enhance direct lending to select vital sectors, such as industry, technology, healthcare, and food security, in addition to developing new and unique financial products, such as long-term financing, capital investment, and asset-backed financing.

Not only that, but there are non-financial products and services that the bank will provide to transfer and build knowledge, to those who need it most, from entrepreneurs, emerging and small companies.

Emirates Development Bank announced the establishment of a fund of one billion dirhams to support small and medium-sized companies, in order to accelerate their development, growth, and increase their influence and role in the national economy, and this is a huge quantum leap that will work to develop a radical solution to one of the biggest and most difficult challenges that these companies have faced throughout the years Long past.

The door is now wide open for those with young minds for innovation and creativity to enter new investment fields that open up wider horizons for them in the world of finance and business.

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