Micro, small and medium enterprises (MSMEs) are more likely to succeed and contribute to social and economic development if they adopt established corporate governance frameworks and policies, according to an expert panel convened by the Pearl Initiative.

The GCC-based non-profit organisation, works to foster corporate governance transparency in the Gulf region within the private sector.

The panel discussed the importance of MSMEs in creating a sustainable business model that helps them address current challenges such as regulations, absence of collaterals, high interest rates and inadequate credit history, as well as ways to attract equity and debt capital.

Panellists included high-impact entrepreneurs and business figures such as Fahim Al Qasimi, Managing Partner at AQ&P; Fadi Sidani, Managing Partner at Governance Dynamics; Shaheeda Abdul Kader, investment advisor and entrepreneur; and Nick Nidal, corporate governance advisor.

SMEs are the backbone of the GCC economy thanks to their sizable contribution to the workforce and national GDPs. In the UAE, the SME sector represents over 94 per cent of total companies and employs over 86 per cent of the private sector workforce, according to 2019 figures by the Ministry of Economy. Within Dubai, SMEs contribute to 95 per cent of companies and employ 42 per cent of the workforce, contributing 40 per cent of Dubai’s GDP.

During the virtual session which was attended by 40 business leaders and senior executives from the Gulf region, the speakers emphasised the need for small businesses to create the right structure and frameworks to grow and overcome adversities such as the Covid-19 pandemic. The panellists also underlined the importance of understanding and complying with the regulations in the countries where MSMEs operate.