Kippreport gets insights from Mike Belk, CEO and president of Daimler Middle East and LevantMarch 26, 2015 12:02
StanChart sees potential in UAE small caps
Current 17,000 UAE customers to double in 3 years; Positive on economic outlook despite funding challenges
April 11, 2011 3:44 by Reuters
Standard Chartered plans to double the number of small and medium-sized enterprise customers in the United Arab Emirates within three years as economy improves, executives said on Monday.
Small businesses in the seven-member UAE faced difficulties accessing loans following the global downturn and Dubai’s debt crisis, and banks still remain hesitant to provide financing.
Standard Chartered currently has 17,000 customers in the UAE, but the UK lender plans to double this figure by end-2013, Subroto Som, the bank’s global head of small and medium-sized enterprises (SME) banking, told Reuters in an interview.
UAE banks have been flush with cash in recent months as deposits rose, but lending is slow to pick up despite improved business sentiment after state-owned Dubai World reached a deal to restructure $25 billion in September.
In Dubai, a regional trade hub that lacks the oil wealth of neighbouring Abu Dhabi, SMEs account for 95 percent of firms, according to the bank. SMEs in the trading sector typically have up to 75 employees and a maximum turnover of 250 million dirhams ($68 million).
Sadia Saeed, general manager of SME banking UAE at Standard Chartered, said the economic outlook for the UAE had improved although funding access still remained a challenge.
“We are very positive on the economy, and think that the worst is behind the country. The economy is now in upturn,” she said.
Analysts polled by Reuters expect the UAE economy to grow by 3.4 percent in 2011.
Bank loans to SMEs accounted for only 2 percent of total lending in Gulf Arab countries, an October survey by the Union of Arab Banks and the World Bank showed.
(Editing by David Cowell)