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UAE: 88 per cent of SMEs in the country optimistic about future growth

Dubai - SMEs sector contribute to more than 53 per cent of the UAE’s non-oil GDP and its set to rise to 60 per cent by end of 2021.

The confidence of Small and Medium Enterprises (SME), a vibrant ecosystem that represents more than 94 per cent per cent of total companies in the UAE, is on the rise, according to the latest research by Mastercard.

The study said 88 per cent of SMEs in the UAE, that faced unprecedented changes in the wake of the Covid-19 pandemic, are now optimistic about future growth guided by potential for digitalization, access to funding and upskilling.

The SMEs sector contribute to more than 53 per cent of the UAE’s non-oil GDP, and this percentage is expected to rise to 60 per cent by the end of 2021, and to higher levels in the coming years, according to Younis Haji Al Khoori, Under-Secretary of Ministry of Finance.

The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index also found that two-thirds (66 per cent) are projecting revenues that will either grow or hold steady.

“As many regional economies gradually enter the normalization and growth phase, and social restrictions continue to ease, small and medium sized businesses in the UAE have identified easier access to funding (40 per cent), acceptance of digital payments (34 per cent) and training and upskilling staff (34 per cent) as the top three drivers for growth. This highlights the opportunities for small businesses that arise from both internal transformation as well as industry regulations and trends,” said the study.

When asked about the main thing that keeps them up at night, 60 per cent of SMEs in the UAE mentioned the challenge to maintain and grow their business was their top issue. Looking at concerns over the next 12 months, 61 per cent identified the rising cost of doing business, while 38 per cent cited the need for easier access to capital and funding.

“Starting a business is one of the most ambitious and rewarding things one can do, and it’s great to see that confidence is returning to the UAE’s SME sector after a challenging period. The study highlights the potential of several key drivers of growth that small and medium businesses in the UAE rely on as they look towards an optimistic future. At Mastercard, we connect SMEs to the technologies, the network and the expertise they need to sustainably grow their businesses, collaborating to build prosperous and more inclusive economies,” said Girish Nanda, country manager, UAE and Pakistan, Mastercard.

The study estimated that 20-30 per cent of the Covid-19 related surge in commerce would be a permanent trend in share of overall retail spending globally. Furthermore, recent studies from Mastercard showed that 73 per cent of UAE consumers are shopping more online than they did since the start of the pandemic and 97 per cent of UAE shoppers would consider making a purchase with an emerging payment technology over the next year.

A key focus for Mastercard is to make sure that SMEs have all the support they need to go digital and grow digital.

issacjohn@khaleejtimes.com