Page 442 - Sustainable Cities and Communities Design Handbook

412 Sustainable Cities and Communities Design Handbook

attract strategic foreign investments and add value to the existing business
community, providing a stable and attractive business environment. The UAE
market strengths (according to the presented SWOT analysis) are numerous.
The country is committed to maintaining the policy of economic openness,
actively seeking to develop projects that are in harmony with the changes
taking place in the world.
Despite the numerous policies that are in place, there are some deficiencies
regarding SMEs’ debt financing. “Dubai SME,” part of the Department of
Economic Development, revealed that 86% of the SMEs have not sought bank
finance. It reflects how difficult it is for this sector to get a bank loan. This
shows the gap between the government directives and the banks’ policies.
Bank financing is the predominant source of external financing for most
SMEs. However, banks consider SMEs to be relatively high risk as most of
their businesses are service activities. Most of the commercial banks are keen
on funding the working capital needs of businesses, but less on funding start-
ups. There is a need for dedicated banks, working on commercial principles
but devoted to financing the SMEs, especially start-ups. Currently, not only the
UAE but the entire GCC lacks institutions that specialize in funding SMEs.