The UAE’s Securities and Commodities Authority (SCA) is working with the Ministry of Economy and the Organisation for Economic Co-operation and Development (OECD) to launch a new international initiative to create a platform for funding small and medium-sized enterprises (SMEs), said a report.

The SCA is coordinating with the Ministry of Economy, which will provide the regulatory and legislative framework for funding SMEs. Once the regulatory framework is created, the SCA and the markets will be prepared to launch the platform, Dr Obaid Al Zaabi, chief executive officer of the SCA, was quoted as saying in a Wam report.

According to the SCA, the process for funding such companies will involve monetary funds, which will have the authority to collect the necessary funding for these companies, it said.

Dr Karim El Solh, co-founder and CEO, Gulf Capital

The platform, which will be similar to crowdfunding, will manage quality control and handle issues related to accreditation and applying the Corporate Governance Charter.

Small and medium-sized companies are the main drivers of the UAE’s economy, and are key to supporting its strategic productivity structure, as they represents over 94 per cent of the total number of companies in the country, 73 per cent of the wholesale and retail trade sector, 16 per cent of the services sector, and 11 per cent of the industrial sector.

The number of such companies now exceeds 350,000, which provide work opportunities for over 86 per cent of the total private sector workforce. They also make up over 60 per cent of the country’s gross domestic product (GDP), which the ministry predicts to increase to 70 per cent by 2021.

Contribution rises

In Dubai alone, small and medium-sized companies represent close to 95 per cent of all local companies and 42 per cent of the workforce, while making up some 40 per cent of the emirate’s GDP.

SME contribution to Dubai’s economy rose from 40 per cent in 2009 to 47 per cent in 2016 while their contribution to job creation rose from 42 per cent to 52.4 per cent during the same period in spite of slow global economic growth, according to a report by Dubai SME, the agency of the Department of Economic Development (DED) in Dubai mandated to develop the small and medium enterprise (SME) sector. DED in conjunction with the Dubai Statistics Centre, released the new study on the local SME sector as part of Dubai SME Development Plan (SMDP), which is part of the Dubai Plan 2021.

Dr Obaid Al Zaabi, CEO, SCA

Younger start-ups make up nearly 50 per cent of the companies registered in Dubai and it validates the emirate’s appeal as a global centre for entrepreneurship, knowledge transfer and innovation, which also boasts of a state-of-the-art infrastructure and flexible legislative framework conducive to investment.

Sami Al Qamzi, director general of DED, said that SMEs in Dubai have demonstrated their ability to withstand regional as well as global instabilities and continued to march with confidence.

He reiterated DED’s commitment to enabling local SMEs to adopt best international practices and strengthening their role in economic development in Dubai. Al Qamzi also stressed the need for clear policies that enable SMEs to absorb rapid changes and grow sustainably thus reinforcing the emirate’s competitiveness.

The study adopted the official definition of SMEs in the UAE for the first time on a database in Dubai.

The UAE is continuing to help improve the performance of small and medium-sized companies, through initiatives and programmes that provide them with funding, added the report.

 Resilience

The finalists of the 2018 Gulf Capital SME Awards reported a two-year compounded annual growth rate of 100 per cent, underscoring the resilience of small businesses in the UAE amidst challenging economic times.

A total of 97 finalists have been shortlisted this year, with 11 per cent increase in entries compared to 2017, highlighting another banner edition of Meed’s awards programme that recognises success, innovation and growth in the SME sector in the Emirates, said a statement.

John Emmerson, director, SME Awards, Meed, a leading business intelligence provider in the Middle East, said: “Every year we are astounded at the quality of the entries we receive, which makes it more difficult to shortlist and then pick winners – this is a testament to the vibrancy of the SME sector in the UAE and that it continues to be a core driver for growth in this country.”

Equally impressive, the finalists reported a combined turnover of Dh1.3 billion ($353.91 million) last year which shows small businesses continue to be a key pillar of the UAE’s development, it said.

Dr Karim El Solh, co-founder and CEO of Gulf Capital, one of the largest alternative asset management firms in the Middle East and the headline sponsor of the awards, said: “These numbers without a doubt prove that the UAE has put in place very strong fundamentals to support the growth of the SME sector in the Emirates.”

“More and more small businesses are reporting remarkable growth, and this awards programme which we have been supporting for the last six years have put the spotlight on entrepreneurs and business leaders who are making a difference by innovating and pursuing new avenues of growth that contribute to the dynamism of the economy,” he added.

The finalists are competing in 16 award categories, including B2B Small Business of the Year (above Dh15 million ($4.08 million), B2B Small Business of the Year (below Dh15 million), B2C Small Business of the Year, Business Innovation of the Year, Customer Focus of the Year, Digital Business of the Year, Disruption of the Year, Micro Business of the Year, People and Culture of the Year, Start-up Business of the Year and Sustainable Business of the Year, said a statement.

Supporting the UAE government’s entrepreneurial drive, the awards programme also honours outstanding business by its citizens with the Emirati Business of the Year awards. Three individual trophies will be given to the Entrepreneur of the Year, Business Leader of the Year and the New Entrepreneur of the Year.

The highly sought-after Gulf Capital Business of the Year award is being contested by Bin Touq Transport, Bizx Trading, Emitech Technical Services, FLC Marketing, Himatrix Middle East, Lunatus, Phanes Group, Spatial Composite Solutions, Tablix Technology, Time Hotel, Tour Dubai 1 Floating Restaurant and yallacompare.

Meed’s SME awards programme is supported by endorsing partners Dubai SME and the Khalifa Fund for Enterprise Development; as well as Gulf Capital and Virtuzone as sponsors.

The shortlisted SMEs will go through another round of evaluation by the judging panel after which the final set of winners will be announced on September 26, at Ritz Carlton DIFC, in Dubai, UAE, it stated.