Almost 9 out of 10 UAE-based SMEs are optimistic about the next 12 months – study

Small and medium enterprise (SME) confidence in the UAE is on the rise, according to a latest study.

The Mastercard Middle East and Africa (MEA) SME Confidence Index revealed that 88 per cent of SMEs in the UAE are optimistic about the next 12 months and 66 per cent are projecting revenues that will either grow or hold steady.

Access to funding, digitalisation and skills key for future growth
With regional economies entering the normalisation and growth phase, and social restrictions continue to ease, UAE-based SMEs have identified easier access to funding (40 per cent), acceptance of digital payments (34 per cent) and training and upskilling staff (34 per cent) as top three drivers for growth. Mastercard works with the government, financial organizations and the wider business community to create opportunities for the over 400,000 SMEs that operate within the country and provide employment for over 86 per cent of the UAE workforce, a statement said.

Mastercard has pledged $250m and committed to connect 50 million micro, small and medium size businesses globally to the digital economy by 2025 using its technology, network, expertise and resources to build a sustainable and inclusive digital economy. The company is also focused on connecting 25 million women entrepreneurs. For many small businesses, reducing their dependence on cash through digital payments acceptance, has been key in being able to get paid and maintain revenues, the statement added.

“Starting a business is one of the most ambitious and rewarding things one can do, and it’s great to see that confidence is returning to the UAE’s SME sector after a challenging period,” said Girish Nanda, country manager, UAE and Pakistan at Mastercard.

“The study highlights the potential of several key drivers of growth that small and medium businesses in the UAE rely on as they look towards an optimistic future. At Mastercard, we connect SMEs to the technologies, the network and the expertise they need to sustainably grow their businesses, collaborating to build prosperous and more inclusive economies.”

Cost of business remains key concern; public and private partnerships seen as engine for growth
As many as 60 per cent of SMEs in the country mentioned the challenge to maintain and grow their business was a top issue. Looking at concerns over the next 12 months, 61 per cent identified the rising cost of doing business, while 38 per cent cited the need for easier access to capital and funding. Private sector partnerships (57 per cent) and government-led initiatives (53 per cent) were identified as having the biggest potential to positively impact SMEs and the wider UAE market.

“Access, whether it is to growth, stability and financial support, stands out as the top concern that SMEs in the UAE face today. The fundamental benefit of a digital economy is that it eases access across these barriers. Whether it is the ability to sell online, acquire a larger customer base through e-commerce, or enable instant access to apply for or extend credit lines through digital banking, the digital economy works for everyone,” added Nanda.

Mastercard’s Economic Outlook 2021 estimated that 20-30 per cent of the Covid-19 related surge in e-commerce would be a permanent trend in share of overall retail spending globally. Furthermore, recent company studies showed that 73 per cent of UAE consumers are shopping more online than they did since the start of the pandemic and 97 per cent of UAE shoppers would consider making a purchase with an emerging payment technology over the next year.