Dubai: Trade activity between the UAE and China, both part of the One Belt, One Road Initiative (OBOR), may have amounted to $33 billion (Dh121 billion), according to a senior government official.
“The UAE is an important trading partner for China. In addition, both the countries have several strategic partnerships in place to promote scientific research and renewable energy and water, and this cooperation is set to expand the mutual trade between the UAE and China,” Abdullah Al Saleh, Undersecretary for Foreign Trade, UAE Ministry of Economy told delegates on the second day of the Annual Investment Meeting.
The OBOR Initiative is a $900 billion policy initiated by the Chinese government to build on ancient trade routes from China through central Asia by rail (Belt) and to Africa and beyond by sea. The initiative covers 69 countries which make up 60 per cent of the world’s population and 40 per cent of global gross domestic product (GDP), according to a report released by Knight Frank.
Meanwhile, other delegates emphasised the role fintechs can play in SME financing.
Fintechs must come out of their comfort zone of looking at payments or consumer lending or target other bank products, and should cater to lending to the underserved Small and Medium Enterprises, according to Qamar Saleem, Global Lead — SME Banking Practice at World Bank-backed International Finance Corp, which works across 120 countries.
Currently, fintech lending is not more than $300 billion, of which SME lending is only 30 per cent, and that needs to change, said the executive at IFC, which caters to more than 120 countries.
“There is a four corner model that is needed. Banks will have to come to the party. Regulators need to create financial ecosystems. Corporations have responsibility in the ecosystem,” Saleem said.
Currently, SME faces four challenges in terms of finance, access to markets, knowledge and technology.