41331
SMEs in UAE Struggle as Economy Slows
World Economy

SMEs in UAE Struggle as Economy Slows

Small and medium-sized businesses in the UAE continued to feel the pinch in the first quarter as the economy slowed with payment collection and tapping debt remaining difficult, according to a survey by the SME financier Gulf Finance.
Despite the gloom however, Gulf Finance’s chief executive, David Hunt, said that there are increasing signs of stability such as the fact that these businesses have not accelerated layoffs and expect to keep headcounts stable during the second quarter, Arabian Business reported.
Nonetheless, he said any improvement would be gradual and that the rebound in the price of oil during the first quarter would take time to filter through the wider economy.
“As a whole, our first-quarter survey has seen a cautious rebound in trade and commerce while holding firm on hiring and pulling back on regional expansion,” Hunt said. “Yet one needs to note this has been accomplished at a lower entry point to previous quarters and we will get a clearer picture of whether this is a dead cat bounce or a more prolonged recovery.”
According to the survey, one in four respondents during the first quarter said they had difficulty collecting payments, and while there was an improvement from the fourth quarter in raising funds, that ability remains well below what it was during the first quarter of 2015.
UAE government officials have been counting on small businesses to play a key role in the development of the economy.
SMEs account for 86% of the workforce in the private sector, according to the ministry of economy. And 300,000 companies can be classified as part of the SME sector.
The push to promote SMEs, however, has been handicapped by the slowing economy after the price of oil shed nearly 70% of its value since mid-2014.
Meanwhile, UAE’s banks are increasingly sharing information in a bid to prevent losses incurred through SME owners skipping the country, according to the head of KPMG, a global network of professional firms providing Audit, Tax and Advisory services, Rajesh Prasad.
KPMG’s new UAE Banking Perspectives 2016 report found that the UAE’s 10 biggest listed banks grew profits by a combined 11% last year, mainly due to a 9% decline in impairment charges.
Overall, the ratio of non-performing loans on banks’ books dropped by 4.1%, but the SME sector (which represents about 4% of total loans and advances made by banks) was negatively affected by plunging commodities prices, tighter liquidity and cash flow struggles as payment periods from government-related entities lengthen.

Short URL : http://goo.gl/ilomRT
  1. http://goo.gl/Xwxtak
  • http://goo.gl/PA8hn6
  • http://goo.gl/E5wJIk
  • http://goo.gl/YJVN5N
  • http://goo.gl/IcFHPT

You can also read ...

Shifting transactions from cash to digital payments holds great promise for  individuals, businesses and governments.
More than 23% of the world's economy operates out of sight of...
Federal Reserve Board Chairman Jerome Powell speaks during a hearing before the Senate Banking, Housing and Urban Affairs Committee.
US Federal Reserve Chairman Jerome Powell said protectionism...
India Launches 888 Anti-Dumping Probes
The Indian government has initiated as many as 214 anti-...
Fitch Retains Philippine  Debt Rating
Global debt watcher Fitch Ratings kept the Philippines’...
The warnings come amid a period of financial uncertainty for the world.
US officials who helped the country survive the 2008 financial...
EU to Fine Google $5 Billion
Google will be fined about €4.3 billion ($5 billion) by the...
Africa Next Frontier for Crypto
Cryptocurrency is not bound by geography because it is...
UN to Help Rebuild Gaza Economy, Create Jobs
Against the backdrop of rapidly rising tension, violence,...

Trending

Googleplus