AbdulAziz Al Ghurair Image Credit: Mashreq

Dubai: The UAE Banks Federation (UBF) on Sunday held and open forum in association with Emirati Entrepreneurs Association (EEA) to explore ways to support UAE entrepreneurs to grow their businesses.

Addressing the gathering attended by more than 100 Emirati entrepreneurs and senior officials from the banking industry, Abdul Aziz Al Ghurair, Chairman of UBF, said the banking sector in the country is keen to work closely with entrepreneurs and small and medium enterprises (SMEs) addressing their concerns regarding access to finance.

“Access to finance is a major challenge for entrepreneurs and start-ups. While SMEs form around 90 per cent of the total number of registered companies in the UAE, a major portion remains to have limited access to finance,” said Al Ghurair.

The joint forum discussed a number of themes ranging from absence of an organisational governance structure, the lack of appropriate training opportunities, innovation capabilities and business experience. Challenges associated with cash flow and pricing policies, limited access to technology, insufficient knowledge of the industry and market and failure to secure effective negotiations with external stakeholders were also identified as roadblocks.

With limited access to finance identified as a top challenge for SMEs and entrepreneurs, the discussions drew attention to reasons behind it which helped applicants better understand the screening process. Top reasons included: high operational costs, insufficient securities and credit records, inaccurate financial statements, lack of continuity and expertise, weak governance and low potential for financial independence.

“It is clear that there is a need for the financial sector to facilitate more effective SME-bank relationships through awareness initiatives that will enable companies to successfully secure the external financial support they need,” said Al Ghurair.

While calling on entrepreneurs to be creative in their ventures, Al Ghurair called more transparency and diversified businesses.

“SMEs face several challenges when trying to identify financing resources, and our initiative today, held in collaboration with the UAE Banks Federation, aims to target these challenges by offering a dedicated platform to fuel a solid discussion among entrepreneurs and banks. The open dialogue is aimed at facilitating stronger communication and collaboration channels for the benefit of all involved,” said Sanad Al Meqbali, Chairman of Emirati Entrepreneurs Association.

The session moderated by Jassim Al Bastaki, Secretary General, Emirati Entrepreneurs Association, said entrepreneurs should develop a healthy relation with banks and the interactive sessions like the ones held with UBF will go a long way in achieving this goal. “The relationship between banks and SMEs, with respect to financing, is currently facing a number of challenges, and is directly linked with the securities provided, the repayment periods, and the development of a financing service to meet the needs of the SME sector and support its long-term growth,” said Al Bastaki.