Some Dh400 million has been distributed by Abu Dhabi's Khalifa Fund to Support and Develop Small and Medium Enterprises, but financing still an issue says its chief executive.
Cash call for new private businesses
Government and private-sector leaders say a lack of financing for small businesses across the UAE remains a stumbling block for what is seen as a key element in plans for the country's non-oil economy.
Abu Dhabi's Khalifa Fund to Support and Develop Small and Medium Enterprises has distributed about Dh400 million (US$108.8m) to 233 projects since its inception in 2007.
But Dr Ahmed al Mutawa, the chief executive of the Khalifa Fund, said his organisation's mission of reducing unemployment among Emiratis and helping to create private businesses was being hampered by banks' focus on big loans for big corporations.
"Creating organisations to fund small and medium enterprises and encouraging banks and commercial finance bodies to devote a greater part of their funds to small and medium enterprises will reflect positively on the national economy," he said at a conference in Abu Dhabi yesterday.
A private sector populated by thriving small businesses has become a priority for Federal and emirate-level governments as they prepare for an influx of hundreds of thousands of Emiratis into the workforce during the coming decade.
More than half of Emiratis are under 20, a population governments are trying to prepare for entry into private-sector work in preference to scarcer government jobs.
Mohammed bin Abdulaziz Alshihhi, the general director of the UAE's Ministry of Economy, said at the Abu Dhabi Forum for Small and Medium Enterprises that aiding small businesses would enhance competitiveness, spur innovation and attract foreign investment into the UAE.
"In building a robust and dynamic economy capable of adapting easily to all the economic changes", it was crucial to address the lack of financing, high costs and lack of skills to run businesses, he said.
Resolving the lack of financing appears to be at the top of the agenda. Mohammed Abdullah, the undersecretary of the Abu Dhabi Department of Economic Development, said the Government had to "double efforts" to help small businesses by broadening financing options and making legislative changes that include a new small-business law that government ministries expect to be in place next year.