Dubai: Faced with declining oil prices and a contraction in economic activity, small-to-medium-size enterprises (SMEs) in the UAE are confronting a number of challenges in securing new businesses, realising payments, meeting financial obligations and obtaining funding for working capital and expansion.
Amidst such challenges, the sector is fast maturing to become a highly bankable segment of the economy offering reliable asset quality to the banking sector.
The banking sector in the UAE is working closely with SMEs to make more players in the sector bankable.
The National Bank of Abu Dhabi (NBAD) recently launched a free business skills academy with the purpose of driving growth in the SME sector.
Since its launch in September 2015, over 100 SMEs in the UAE have benefited from essential skills training from the NBAD SME Academy.
“SMEs represent one of the most important components of the UAE’s future growth — that’s why we take the task of nurturing these businesses very seriously,” said Alex Thursby, Group CEO of NBAD. “For SMEs to succeed, the two fundamental requirements are access to finance, and well-developed business skills.”
The NBAD SME Academy provides a series of free skill-based workshops that focus on helping SMEs develop fundamental skills. These workshops are being conducted by expert institutions, including Moody’s Analytics, the Association of Chartered Certified Accountants, Ron Kaufman and Hawkamah — the Institute for Corporate Governance.
The training programme is focused on areas such as how to make business bankable; understanding and implementing principles of accountancy; understanding corporate governance; attaining leadership in customer service and strategies for expansion and growth.
SMEs in the UAE reported negative growth for the third quarter of this year as they struggled to raise finance and collect payments, according to a recent survey.
A study by the Gulf Finance Corporation showed that only 78 per cent of SMEs were positive about their growth outlook in the third quarter, compared to 93 per cent in the previous quarter.
Meanwhile the number of respondents who see growth levels stagnating rose to 14 per cent this quarter from 6 per cent in the second quarter of the year. Around 7 per cent of the respondents said that they expect growth to be negative in the third quarter of 2015.
“In a difficult business environment, right knowledge support is important for the industry,” said Nilanjan Ray, managing director, Global Commercial Banking of NBAD. “This is where our programme becomes all the more relevant to this important segment of the economy.”
The majority of participants that attended the pilot programme said that they joined the NBAD SME Academy to learn how they can better improve trade relationships with international and government companies, how to raise turnover and profitability as well as expanding into new markets and becoming key players in their industry.
Of those who have attended the skills-building workshops, 23 per cent of the delegates were from the manufacturing sector, 21 per cent from the media sector, 15 per cent from consultancy businesses, 11 per cent from trading and the remainder from businesses focused on education, finance, construction and IT.