Improving access to finance for Arab small and medium-sized businesses could boost regional economic growth by up to 1 per cent per year and generate 15 million new jobs by 2025, according to the International Monetary Fund’s Christine Lagarde.
On Sunday at the World Government Summit in Dubai, the Washington-based lender's managing director called on regional governments and financial institutions to help close the funding gap for SMEs, which are largely considered to be the backbone of regional economies.
"In the Arab region, SMEs represent 96 per cent of registered companies, said Ms Lagarde. "They also employ half the labour force, yet their access to finance is the lowest in the world: lending to SMEs in the region is only 7 per cent of bank lending."
“Closing this financial inclusion gap – with respect to the average of emerging and developing countries – would yield multiple economic benefits,” she added.
As well as boosting annual gross domestic product growth across Arab economies, bridging the financing gap could also increase the effectiveness of fiscal and monetary policies, by improving domestic revenue mobilisation and monetary policy transmission.
“It is clear then, that supporting and enabling SMEs is a key component of any inclusive growth agenda,” Ms Lagarde said.
Increasing the contribution of SMEs to the economy is a key objective of the UAE’s national growth strategy. In Dubai, SMEs account for less than 40 per cent of the emirate’s total GDP, but the Dubai SME 2021 Strategic Plan aims to increase this to 45 per cent by 2021.
With the three-year oil slump that began in 2014 but has now reversed, lenders became more averse to lending to small businesses, which curtailed their ability to grow or endure the downturn.
In her speech, the IMF managing director listed a range of economic and institutional factors needed to help scale up SME bank credit.
They include fostering a sound and competitive economy and banking sector that facilitates market entry for SMEs without the state crowding out financing for them. Equally important is ensuring good governance, strong legal frameworks, financial supervisory capacity and availability of credit information to reduce the risk of lending to SMEs.
IMF research shows that increasing the coverage of credit bureaus in the Arab region could raise employment, especially by SMEs, Ms Lagarde.
Finally, Arab countries should look at harnessing the potential of alternative channels of SME finance, such as including SME segments on regional capital markets, and developing the fintech (financial technology) sector to expand the range of financing available.
“Promoting SME financial inclusion requires a holistic approach – there is no magic bullet,” Ms Lagarde said.
On Tuesday this week the IMF will publish a report on SME financial inclusion, she added. The lender seeks to better support Arab countries within this realm, and help countries that are already implementing strategies to increase financing for SMEs – such as, the UAE, Egypt and Jordan – to achieve their goals.
“We hope [the report] will mark the start of a deeper engagement with our members in this important policy area,” Ms Lagarde said.
Day 1, Dubai Test: At a glance
Moment of the day Sadeera Samarawickrama set pulses racing with his strokeplay on his introduction to Test cricket. It reached a feverish peak when he stepped down the wicket and launched Yasir Shah, who many regard as the world’s leading spinner, back over his head for six. No matter that he was out soon after: it felt as though the future had arrived.
Stat of the day - 5 The last time Sri Lanka played a Test in Dubai – they won here in 2013 – they had four players in their XI who were known as wicketkeepers. This time they have gone one better. Each of Dinesh Chandimal, Kaushal Silva, Samarawickrama, Kusal Mendis, and Niroshan Dickwella – the nominated gloveman here – can keep wicket.
The verdict Sri Lanka want to make history by becoming the first team to beat Pakistan in a full Test series in the UAE. They could not have made a better start, first by winning the toss, then by scoring freely on an easy-paced pitch. The fact Yasir Shah found some turn on Day 1, too, will have interested their own spin bowlers.
MATCH INFO
New Zealand 176-8 (20 ovs)
England 155 (19.5 ovs)
New Zealand win by 21 runs
START-UPS%20IN%20BATCH%204%20OF%20SANABIL%20500'S%20ACCELERATOR%20PROGRAMME
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The biog
Title: General Practitioner with a speciality in cardiology
Previous jobs: Worked in well-known hospitals Jaslok and Breach Candy in Mumbai, India
Education: Medical degree from the Government Medical College in Nagpur
How it all began: opened his first clinic in Ajman in 1993
Family: a 90-year-old mother, wife and two daughters
Remembers a time when medicines from India were purchased per kilo
Tickets
Tickets start at Dh100 for adults, while children can enter free on the opening day. For more information, visit www.mubadalawtc.com.
Abu Dhabi Sustainability Week
Results
57kg quarter-finals
Zakaria Eljamari (UAE) beat Hamed Al Matari (YEM) by points 3-0.
60kg quarter-finals
Ibrahim Bilal (UAE) beat Hyan Aljmyah (SYR) RSC round 2.
63.5kg quarter-finals
Nouredine Samir (UAE) beat Shamlan A Othman (KUW) by points 3-0.
67kg quarter-finals
Mohammed Mardi (UAE) beat Ahmad Ondash (LBN) by points 2-1.
71kg quarter-finals
Ahmad Bahman (UAE) defeated Lalthasanga Lelhchhun (IND) by points 3-0.
Amine El Moatassime (UAE) beat Seyed Kaveh Safakhaneh (IRI) by points 3-0.
81kg quarter-finals
Ilyass Habibali (UAE) beat Ahmad Hilal (PLE) by points 3-0
The biog
Hobbies: Salsa dancing “It's in my blood” and listening to music in different languages
Favourite place to travel to: “Thailand, as it's gorgeous, food is delicious, their massages are to die for!”
Favourite food: “I'm a vegetarian, so I can't get enough of salad.”
Favourite film: “I love watching documentaries, and am fascinated by nature, animals, human anatomy. I love watching to learn!”
Best spot in the UAE: “I fell in love with Fujairah and anywhere outside the big cities, where I can get some peace and get a break from the busy lifestyle”
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Walls
Louis Tomlinson
3 out of 5 stars
(Syco Music/Arista Records)
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Naga
%3Cp%3E%3Cstrong%3EDirector%3A%C2%A0%3C%2Fstrong%3EMeshal%20Al%20Jaser%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%C2%A0%3C%2Fstrong%3EAdwa%20Bader%2C%20Yazeed%20Almajyul%2C%20Khalid%20Bin%20Shaddad%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
Second Test, Day 2:
South Africa 335 & 75/1 (22.0 ov)
England 205
South Africa lead by 205 runs with 9 wickets remaining
Scoreline
Swansea 2
Grimes 20' (pen), Celina, 29'
Man City 3
Silva 69', Nordfeldt 78' (og), Aguero 88'
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
