UAE SMEs see growth in next 12 months on easier funding and digital payments, Mastercard says

Small and medium enterprises in the UAE are optimistic about growth within the next 12 months, identifying easier usage of funding as the most notable driver of future expansion, according to analyze by Mastercard.

Around 88 % of UAE-based SMEs are optimistic about the next 12 months following a challenges of the Covid-19 pandemic, with two thirds projecting revenues will either grow or remain stable, in line with the Mastercard Middle East and Africa SME Confidence Index.

Some 40 % of SMEs surveyed said easier usage of funding is an integral driver of growth, while 34 % pointed to acceptance of digital payments and another 34 % discovered training and upskilling staff as growth drivers.

"It’s great to see that confidence is time for the UAE’s SME sector after a challenging period," Girish Nanda, country manager for UAE and Pakistan at Mastercard, said.

The UAE’s economy is expected to grow 2.4 % as the country slowly but surely recovers from the pandemic-induced headwinds, the Central Bank of the UAE said in June. SMEs will be the backbone of the UAE economy, with the government introducing measures to greatly help business owners weather the crisis.

A lot more than 400,000 SMEs operate in the UAE and offer jobs for 86 per cent of the country's workforce, in line with the Khalifa Fund for Enterprise Development.

Asked about the key concern these businesses face, 60 per cent of the SMEs surveyed said maintaining and growing their business was their top issue, according to Mastercard.

More than half the businesses said private sector partnerships (57 per cent) and government-led initiatives (53 %) have the biggest potential to positively impact SMEs and the wider UAE market.

“Access, whether it is to growth, stability and financial support, certainly is the top concern that SMEs in the UAE face today," Mr Nanda said. "The essential benefit of a digital economy is that it eases access across these barriers."

The opportunity to sell online, get a larger customer base through e-commerce, or permit instant access to use for or extend lines of credit through digital banking, are a number of the techniques the digital economy works for various businesses, he added.

The Covid-19 pandemic has accelerated a consumer shift to online shopping and food deliveries in the centre East amid movement restrictions to curb the spread of the virus.

As consumer trends change in a post-pandemic world, businesses must adapt and plan the near future, Mastercard said in its report.

Mastercard’s Economic Outlook 2021 estimated that 20 to 30 % of the pandemic-related surge in e-commerce will be a long term trend in the share of overall retail spending globally.

Recent Mastercard studies also showed that 73 % of UAE consumers are shopping more online than they did because the start of pandemic and 97 % of UAE shoppers would consider making a purchase with an emerging payment technology over another year.