SMEs are a backbone of the UAE economy, and the partnership is a renewed effort to support them during the pandemic recovery.
UAE’s Ministry of Finance is partnering up with Dubai SME, a division of Dubai’s governmental body Department of Economic Development, in a bid to support entrepreneurs and small and medium sized-enterprises (SMEs) in the UAE.
Under the agreement, which has been agreed preliminarily, both parties will encourage business owners of SMEs to sign up in the Federal Supplier Register at the Ministry of Finance in order for SMEs to be able to participate in government tenders offered by federal entities.
Undersecretary for the Financial Management Sector at the Finance Ministry Mariam Al Amiri said that the ministry is keen to “support and empower entrepreneurs and pave the way for SMEs to contribute to the national economy,” and that it has devised policies and procedures to “stimulate the economy and support the business sector in the country.”
Dubai SME said it will support companies to obtain federal accreditation and will transfer SME business owners’ data to the Finance Ministry to ensure effective communication with them.
Data from the Ministry of Economy in 2019 shows the extent to which SMEs are indispensable for the UAE economy, with SMEs making up a substantial 94 percent of total companies and employing over 86 percent of the private sector workforce.
Additionally, Dubai’s SMEs alone contribute to 40 percent of the UAE’s gross domestic product (GDP).
“SMEs play a vital role in the national economy’s sustainable development,” said Deputy Chief Executive of Dubai SME Saeed Al Marri. “We are committed to enhancing the capabilities of these enterprises and enabling them to be among the fundamental components in various sectors [of the economy].”
In 2020, Dubai implemented various initiatives aimed at softening the economic impact of the pandemic on SMEs, including the Emirati federal government working to ensure access to financing for small enterprises.
Etihad Credit Insurance (ECI) lended $114.3 million worth of trade credit to SMEs in the first 11 months of 2020, to help companies stay afloat and protect liquidity during the pandemic slowdown. In March 2020, ECI struck up a strategic partnership with the Khalifa Fund for Enterprise Development to reinforce SMEs’ exporting capacities.