Abu Dhabi: The Ministry of Economy is preparing a new law for small and medium enterprises (SMEs) to enhance the competitiveness of the state, augment SME performance in the industrial, technological and services fields and raise the participation of citizens in this vital sector.
In a speech at the Abu Dhabi Forum for Small and Medium Enterprises 2010 in Abu Dhabi yesterday, Minister of Economy Sultan Bin Saeed Al Mansouri said the new draft law will contribute to attracting foreign direct investment, thereby enhancing competition in the local business environment.
The minister's speech was read out by Mohammad Ahmad Bin Abdul Aziz Al Shehhi, Undersecretary in the Ministry of Economy.
"The Ministry of Economy in consultation and coordination with its partners in federal and local bodies, has addressed the diverse challenges faced by national owners of SMEs, which include difficulty of access to funding and finance, lack of skills and training, high operating costs and other procedural obstacles," Al Mansouri said.
He said the Ministry of Economy remained deeply committed to exerting all efforts and raising the level of coordination with the various stakeholders involved in the development of SMEs.
Separately, Dr. Ahmad Khalil Al Mutawa, chief executive officer of the Khalifa Fund, said the biggest challenge faced by SMEs is represented by limited avenues of funding for projects in light of the reluctance of commercial banks to provide adequate financial services and facilities.
Funding options
He said the Khalifa Fund offers various funding options to projects that contribute to the national economy through traditional programmes — Khutwa, Bedaya, Zeyada, and the Industrial Fund.
"A total of 233 projects worth around Dh410 million have been financed since the Fund's establishment across various industries like trade, agriculture, services and other sectors," Al Mutawa added.
"The Fund has succeeded in not only dispensing funding, but also building a culture of training and technical qualification among citizens and offering over 100 specialised training programmes that have benefited over 1,800 citizens in Abu Dhabi, Al Ain and the Western Region," said Al Mutawa.
Small and mid-sized enterprises are emerging as the flavour of the season in the Gulf, with Qatar and the UAE taking the lead in attempting to create the right environment for these businesses to flourish.
The former has just confirmed that Capitas Group International in Saudi Arabia, will advise on the formation of Enterprise Qatar, an agency to be dedicated to furthering the interests of SMEs.
Enterprise Qatar is to assume the responsibility of helping SME owners gain access to capital, and take on policy initiatives on their behalf.
Unofficial estimates say this sector accounts for 30 per cent of GDP and about 71 per cent of employment
With a more supportive regulatory regime to back them up, local and regional authorities hope these SMEs can be prompted to seek out new growth levels for themselves.
