What have been some milestones of Dubai SME?
One was being able to bring our agenda of support and assistance to the SME sector to its highest level, increasing the saliency of SMEs in the vision and strategies that guide Dubai and the UAE's development. Having support from the top allowed us to create an effective ecosystem to work in, while establishing a high-level macro policy for SME development has also been a great achievement. After the establishment of Dubai SME, every other Emirate has emulated our actions. The direct injection of AED350 million (USD95.37million) in subsidies to SMEs that we support is a remarkable figure that also represents our success as an organization. Prior to 2002, Emirati graduates largely opted for employment and support, and guidance for entrepreneurs and start-ups was inadequate. Since 2002, the option to create one's own job and business has emerged. There were major gaps in the market when we started, and we had to create access to start-up finance, incubators, government projects, and subsidies as well as full legal support.
How do you support Emirati SMEs in expanding their businesses globally?
Internationalization requires different steps. We support businesses, from home start-ups up to businesses valued at AED250 million (USD68.12million). If they have domestic products, they focus on the UAE market. The more ambitious entrepreneurs build their ideas globally from the onset. The best place for such people is Dubai because of our connectivity. Dubai facilitates global connectivity in a myriad of ways, such as direct flights to all over the world. Within the ecosystem of the Department of Economic Development and Dubai SME, we also have Dubai Exports. We train businesses to a certain level and competency where they are able to export effectively. We then link them to Dubai Exports, which brings them to international markets.
What types of SMEs in Dubai are currently exhibiting the most growth?
Currently, the technology and services sectors show the most growth and potential for the near future. However, Dubai is a melting pot and is the most vibrant city in the region. The best talent across all sectors comes here for their start-ups to use Dubai as a base to develop into other markets. When it comes to women, we also have a strong base of female entrepreneurs who have successfully established themselves; however, the system we have created is not gender specific. Women are often more committed, especially when it comes to finance and payments. Today, 35% of our portfolio is women, a number that is expected to grow.
What are the challenges in the market?
The biggest challenge is the structural change in the economy. VAT completely changed the way people operate in 2018. Adjusting to the change is challenging for SMEs, the government, workers, and all other institutions and companies. It is a painful period of structural economic change, in addition to the geopolitical environment. Access to finance is not always easy for certain business sizes because of the banking sector's reluctance to give loans. Banks need to scale up their operations, training, and knowledge of SME finance. This is why we encourage businesses to use SME-related fintech to locate funds. The Mohammed Bin Rashid Fund under Dubai SME has also expanded its partnership with peer-to-peer lending platform Beehive to facilitate funding for our member SMEs. There is huge potential here, and we should not shy away from future opportunities. SMEs constitute 99.2% of the registered businesses in Dubai and employ 52.4% of Dubai's workforce. Within these challenges lie great opportunities. The market is truly suited to sellers, and now is the best time for the entrepreneurs in Dubai to set the tone.