As we start 2015, what do the latest UAE SME surveys say about the state of the sector?

Looking ahead

In 2013–14, the 2008 global recession finally felt far behind us. Economies improved globally: nowhere more than here in the UAE, where stock market growth was stellar, and the property market equally sky-high. That confidence has also been on show in the SME sector, with more events and buzz devoted to its community.
Of course sentiment is one thing; hard facts another. Perhaps the best measure of genuine confidence in the sector was the noticeably warmer attitude the region’s banks have been showing towards SMEs. Several banks and lending platforms have identified this segment as a key strategic focus for them in 2015. Plans include allocating more funds to finance SME projects on a priority basis, evolving special policies for SMEs and launching support systems, platforms and engagements.
In a recent Gulf Times profile, Rohit Garg, Head of Business Banking at Mashreq, said that bank lending has grown around 8–9% compound annual growth rate, as per industry estimates. “In almost all banks, SME lending has grown faster than this rate, and at Mashreq we certainly plan to continue our support to this sector,” he said.

“As the country’s economy continues to grow steadily in the wake of an optimistic sentiment, the UAE has become a magnet for SMEs to start their businesses. The population growth will therefore accelerate consumption, creating a host of opportunities for SMEs to engage and prosper,” he added.
We’ve rounded up all the recent data from the Department of Economic Development in Dubai, to give you five key local facts and figures to compare your own outlook and plans against. Do they match what you’re thinking and feeling?
– The Business Confidence Index for Dubai rose throughout 2014, from 112.2 points early in the year to 140.6 in the latest available reading.
– However large firms are more optimistic than SMEs. Their BCI is currently 148.0 points, compared to 129.4 for SMEs.
More and more business licenses are being granted. The number during Q3 of 2014 increased by three per cent compared to the same period in 2013. A total of 4,688 new licenses were issued, with Industrial licenses up most.
SMEs are relatively confident that sales are going up. 67% predict higher revenues ahead. The net balance for sales revenues is now a positive 60%, compared to 58% a year ago. Firms in the services sector are most confident about sales volumes, with 67% of them expecting to have seen an increase in Q4 2014, compared to 64% in the manufacturing sector and 61% in trading.
– 62% of SMEs forecast their profits would rise during Q4. That’s better than 56% a year ago.

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