SMEs owned by nationals will soon be able to take IPO route
Dr. Adeeb Alafeefi, director for National Programmes for SMEs and Projects at Ministry of Economy.
Dubai - Small and medium enterprises (SMEs) owned by the UAE nationals will soon be able to take IPO route in order to raise funds.
Dr. Adeeb Alafeefi, director for The National Programme for SMEs under the Ministry of Economy, said talks are underway with the UAE equity market regulator to pave way for the SMEs owned and run by citizens to obtain funding through listing on the local bourses.
"As we speak, we are working with federal securities authority to look at applying such methods in getting loans and (opting for) IPOs through bourse for the SMEs. It is at a very early stage but, nevertheless, negotiations have already started and we're looking to forward to see something resolving in 2020," he said.
The programme is aimed at supporting and stimulating the country's SME sector and promote entrepreneurship. Under the National Programme for SMEs, companies owned by citizens are provided financial support from Dh300,000 to Dh30 million, depending on the scale of the business. They are also provided 90 per cent subsidy for taking part in local and overseas exhibitions.
Alafeefi was speaking on the sidelines of a press conference organised to announce 16 new initiatives for 2020 to support these entities.
"Today, we have around 2,000 companies that are 100 per cent owned and run by nationals. Around 500 companies have been added in the national programme in 2019, an increase of 33 per cent from previous year. Next year, we are targeting to add 3,000 because we are sure that with these new initiatives, more nationals will enter entrepreneurships," Alafeefi told Khaleej Times in an interview on Tuesday.
Moreover, 50 training programmes will also be carried out across seven emirates in 2020 which is expected to be attended by 3,000 nationals. These programmes will provide guidelines for marketing, negotiations and managing financial books in the right manner that meet requirements of the banks.
Alafeefi said the ministry will also provide support to SMEs owned by national to offer their franchises to local and international companies. "We are targeting 50 to 100 companies each year to be franchised all over the world. There will be franchise exhibition of around 400 companies, running 6 to 7 weeks during Expo 2020."
He revealed that the ministry will host one exhibition in Abu Dhabi for national SMEs and another exhibition and conference event for GCC companies during Expo 2020.
In addition, the national programme for SMEs will be linked electronically with European entrepreneurship platform which has 11,000 members. "Through this linkage, our companies will be able to access European markets and have partnerships with them and vice-versa."