British lender HSBC announced that it has allocated a further AED1 billion as the second tranche of funding for its small medium enterprises (SMEs) growth fund in the UAE, according to Gulf Business.
The fund, which was first launched in 2010, aims to help SMEs that have an annual turnover of AED30 million and above, to expand internationally or to engage in cross border trade.
The second round of funding comes as the previous allocation of the same amount in 2013 was fully assigned to various businesses, the bank said in a statement.
Just over 40 per cent of the funding in 2013 went to SMEs in Abu Dhabi while firms in Dubai received around 47 per cent of the funding, HSBC said. Another 11 per cent of the funds were allocated to SMEs in Sharjah and other northern emirates.
Overall, the fund was allocated at an average of AED45 million per month, the fastest compared to the bank’s previous allocations, the statement said.
“Confidence within the international SME segment is buoyant, and rightfully so,” said Abdulfattah Sharaf, chief executive officer of HSBC Bank Middle East Limited – UAE.
“SMEs contribute approximately 40 per cent of total UAE GDP, 70 per cent of non-oil GDP, and employ 42 per cent of its workforce. In addition, and true to the UAE’s increasingly strong position as a global player, 70 per cent of the country’s SME’s are internationally oriented.”
Although bank lending to SMEs in the UAE has been historically low, support for small businesses and start-ups is on the rise.