Stark SME stats don’t tell the full story

The issue of lending to SMEs in the UAE was discussed at the Middle East Banking Forum in Abu Dhabi on Wednesday, where a number of solutions were raised to tackle a perceived dearth in funding for the country’s small businesses. Mubarak Rashed Al Mansoori, the governor of the Central Bank of the UAE, said the Bank was working on

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How can government acclimatise lenders to SMEs?

Over the past six months leaders in the banking sector have announced that SME owners and managers were departing the UAE with their companies in trouble and defaulting on their loans. The implication was that the SMEs were in trouble because of a contraction in the economy. However, the banks clarified that a portion of the defaults was because of

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The Characteristics of an Alternative Lender

عربي In a recent article, this column laid out the case for the rise of the alternative lender as a natural consequence to the hole left by conventional banks withdrawing from the SME market. This article looks at what a successful alternative lender might look like. The first step is to understand the relevant characteristics of a conventional SME lender.

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The Rise of the Alternative Lender

Standard Chartered, HSBC, Lloyds and RBS have all withdrawn from the SME sector in the UAE. Is this an indication of problems in the UAE SME sector? Absolutely not. It is an indication of troubled global banks and a flawed banking strategy. Understanding the issue, and the opportunities that it presents, requires an understanding of the common attributes of these

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SME financing needs from management's perspective

Small and medium enterprises (SMEs) have been getting a lot of attention in the past few years. Government initiatives such as the Khalifa Fund and Dubai SME 100 complement private initiatives seeking to provide financing for these SMEs. Everyone agrees that SMEs form an important part of the economy. Everyone also agrees that supporting SMEs is challenging. That is the

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Why SMEs are Survivors

عربي SMEs are a family’s lifeblood. They are built and run by families. They are not conglomerates with diversified business lines, they do not own monopoly agencies guaranteeing income, they do not have special connections to large clients securing lucrative contracts. SMEs are run by the blood, sweat and tears of the family members. If the SME fails then loved ones

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SMEs: The Ignored Middle Child of Banking?

عربي In developing various business plans for SME credit I often review why the commercial banks do not lend to this sector proportional to its contribution to GDP. I have written at length about some of my main ideas but I think there are several secondary issues that also play a role. One is the positioning of SME loans on the risk/reward

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