Challenge remains but hope ahead for SMEs
Initiatives such as the Khalifa Fund for Enterprise Development have provided Emirati entrepreneurs with access to capital - but for expatriates, securing finance is often more troublesome.
Small and medium-sized enterprises (SMEs) in general can find it difficult to raise funding.
"This is often because of their own limitations in making themselves 'bankable', and because banks have rigid approval criteria, which SMEs cannot always meet," says Vishnu Deuskar, the managing director of the small-business consultancy Salvus Strategic Advisors.
It can be particularly difficult for start-ups and early-stage companies. But the situation is improving as banks are now targeting the segment, which often offers higher returns.
"There is a realisation among banks that SMEs can offer a steady and profitable business for banks in the long run," says Mr Deuskar.
And avenues are opening for alternative methods of funding as well.
Eureeca.com, which aims to support the growth of SMEs by helping them to raise funds from the public by selling stakes in the companies for as little as US$100 (Dh367), was launched this month.
The good news is the business environment is stable in the UAE and slightly better than last year, according to Jitendra Gianchandani, the chairman and managing partner of Jitendra Consulting Group, which advises start-ups.
"[It is] also better then the other parts of the world, including the [rest of the] Middle East," he adds.
This is because of the UAE's stable government policies, cheaper rents, logistics and operational costs that are more favourable than in other GCC countries, he says.
"As the economy is showing signs of picking up, we are coming across a growing number of SMEs looking to increase capacity and expand geographically," adds Mr Deuskar.
Updated: July 15, 2012 04:00 AM