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Published By Gulf Business
The UAE’s Securities and Commodities Authority (SCA) has announced plans to launch a platform to finance small and medium enterprises (SMEs).
The organisation said it was working with the Organisation for Economic Cooperation and Development (OECD) and UAE Ministry of Economy, which will provide a regulatory and legislative framework to finance SMEs.
Once the framework is approved the financing platform will be launched.
The SCA said the platform would involve funds with the authority to raise financing for SMEs, in a similar manner to collective project financing.
“The platform will monitor the quality and issues related to accreditation and the implementation of the corporate governance charter,” the organisation said in a statement to UAE news agency WAM.
“The next step will be to put SMEs in the market when they reach a qualifying stage.”
The SCA stressed the importance of the project given that SMEs represent more than 94 per cent of companies operating in the UAE. Of these, 73 per cent are in the wholesale and retail sector, 16 per cent in services and 11 per cent in the industrial sector.
It comes under wider reforms announced in recent weeks to boost the country’s attractiveness for foreign investment after the introduction of selective and value added taxes over the last 18 months, including cuts to fines and fees and stimulus measures.
Last month, Dhs50bn ($13.61bn) of measures were unveiled in Abu Dhabi to stimulate economic growth make it easier to do business, create jobs and boost tourism.
In total the UAE has 350,000 SMEs, which collectively provide 86 per cent of private sector jobs and account for 60 per cent of gross domestic product, according to the announcement.
The Ministry of Economy estimates in Dubai alone SMEs will account for nearly 95 percent of companies, employ 42 per cent of the workforce and contribute 40 per cent of GDP by 2021