Dubai Knowledge Village Hosts Fastest Growing Network of Decision Makers at the ‘Breakfast Club’
Experts and industry leaders discussed and analysed key factors that impact the SME industry given the current climate in the region, at Dubai Knowledge Village’s (DKV) exclusive Breakfast Club. The event is part of a series of networking initiatives organised by DKV to bring together industry professionals and decision makers to highlight current, critical and challenging issues, as an effort to support the overall economic development of Dubai and the wider region.
The session, titled “The Sustainability of SME’s in View of the Current Economic Climate”, tackled key areas that would impact SMEs, including Dubai’s rising cost of living and its impact on smaller businesses, and the effect of this inflation on SME’s profitability. Panellists in the Breakfast Club discussed if SME’s will be forced to lay off employees and curb expansion plans, and if they will afford the average pay adjustment of 5% predicted in 2014. Regulatory adjustments to protect SMEs and their competitive ability were also among the topics debated during the event.
The panel included high profile figures related to the SME sector, such as: Alexandar Mathew Williams, Director of Strategy and Policy Division on Board, Dubai SME – Mohammad Bin Rashid Establishment for SME Development; Marwan Mohammed Al Suwaidi, Director of Finance, Khalifa Fund for Enterprise Development; Ali Ahmad Abdulla Alwan, Owner of Fixit Express; and Tahany Taher, Director of Community Business Banking at National Bank of Abu Dhabi. The discussion was moderated by McClelland Jr., President and CEO of Centre House Ltd.
Hosting the event, Dr. Ayoub Kazim, Managing Director of TECOM Investments’ Education Cluster commented, “Through our events, such as the Breakfast Club, Training Open Week, and the TECOM SME Builder, we aim to continuously support the development of the economy and contribute to Dubai’s sustainability.
In Dubai, SMEs account for over 95% of the private enterprises and contribute to nearly 40% of the emirate’s GDP. SMEs are leading economic growth and job creation in the UAE today, accounting for more than 42% of its workforce. It is therefore a top priority this sector has access to cutting edge knowledge, technology, funding and markets. There is a strong will in the region to create a supportive environment for SMEs, and with many governments and businesses in the region coming forward with incentives and programmes, a promising future lies ahead for home-grown entrepreneurship. Yet, more is needed to provide for the push forward for SMEs, as they are vital to the region’s growth.”
Despite their integral role in the development of the economy, many SMEs continue to face difficulties securing financing at sustainable rates. In fact, the UAE’s total bank lending to SME’s is around 3.85%, when its target is 24.3%. This is due to the fact that banks focus on big loans for big corporations.
Yet, the government has had great efforts to support SMEs and overcome the challenges they face. In fact, the government of Dubai has launched a body dedicated to supporting SMEs: Dubai SME, the SME development agency of the Department of Economic Development (DED). Supported by those efforts, there is a growing realisation that SMEs are often more lucrative for financiers than big firms.
Sheikh Khalifa, President of the UAEA newly approved law also represents a significant step by the UAE government to support SMEs. His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, has approved Federal Law No 2 of 2014, which categorised SMEs and established a dedicated council. The legislation granted SMEs exemptions from customs tax for equipment, raw materials and goods for production purposes. It also exempted them the payment of bank guarantees that companies must pay per new worker.
The UAE government support is also prevalent through several initiatives it has launched, such as the Dubai SME and the Khalifa Fund.
Marwan Al Suwaidi commented: “At Khalifa Fund, we have several pillars such as the ‘Bidaya’, ‘Ziyada’, and ‘Tasnee’e’ programmes that provide funding to nationally-owned start-ups, SMEs and industrial organisations. Besides funding, we have been supporting SMEs in terms of procurement, capacity building and the overall fostering of the entrepreneurial culture.”
Ali Ahmad Alwan said: “The UAE provides various facilities for SMEs, through various means like ease of doing business, transparency, and financial support.”
McClelland Jr. commented saying: “As an expatriate SME, the challenges are different for us, but the UAE government still provides us with the products and services we need to be successful. What I learned today is that there are more facilities available to me, even within the entities that focus on Emirati national development.”