Funding Emirati Entrepreneurs

Banks in the UAE are only funding 4 percent of the small and medium enterprises (SMEs), leaving many entrepreneurs struggling to find the lending they need in order to thrive. However, those in the SME sector have a new opportunity to get the funding they need through Khalifa Fund. This initiative, chaired by Hussain al Nowais, has already disbursed Dh1 billion in loans to almost 800 projects in the past seven years and the Enterprise Development in Khalifa Fund expects these ongoing efforts to be critical in growing the SME sector that will help create jobs for Emiratis and support the economy away from its reliance on oil.

The funding program will help smaller business succeed in downstream industries with the appropriate funding. Traditional bank funding would focus on large-scale industries where it would be needed to avoid failure but this new opportunity will change the way entrepreneurs conduct business. The original problem lies within the upfront costs of attaining a loan through a traditional lender because those in the SME sector are less likely to come up with Dh1m compared to Dh100,000.

These amounts make the program unique because it will fund 90 percent with 10 percent due from the SME entrepreneur and coming up with Dh100,000 is more realistic to many in the SME sector. Hussain Al Nowais is ready to cut down the red tape put up by the banks and make lending an option to those who need it. The origins of the program stem from the challenges put on the SME sector from legislation that upped the contribution of non-oil GDP to 70 percent compared to the current 60 percent. The increase poses additional strains on the SME sector but the fund is aimed at overcoming these challenges in the UAE that will help escalate the likelihood of success for various SME industries.

Some successes that have already benefited from this fund include individual farmers who were struggling to get products in to name brand grocery chains. The fund was able to work on behalf of the farmers and get their products on shelves which means those in the SME sector have an experienced team by their side that can also help infiltrate certain markets.

The effort hopes to bring a stronger economy to the UAE and help small businesses access opportunities in marketing, logistics, packaging and other related needs. Khalifa Fund plans to create these types of opportunities for everyone because their successes will help the overall economy and strengthen multiple sectors. With guided instruction and assistance, those who become a part of the fund will be able to get hands-on help to prevent failure.