Doha Bank to fund SMEs in UAE

Doha Bank, one of the leading GCC-based banks, said on Tuesday that it had earmarked $1.5 billion (Dh5.5 billion) for small and medium enterprises in the UAE.

The bank will support through its licensed branches in Abu Dhabi and Dubai to companies involved in the infrastructure development and construction sectors.

Doha Bank Group CEO Dr. R. Seetharaman said the bank is seeking to participate in the resurgence of the UAE which is building its commercial economic platforms at a steady pace after the property market bubble which impacted the UAE.

Dr. R. Seetharaman also added that Doha Bank is earmarking $12 billion (Dh44 billion) for lending to high-potential clients in the GCC between Qatar, the UAE and Kuwait, where the bank operates full branches. Doha Bank aims to commit about $1.5 billion (Dh5.5 billion) in the UAE focusing on corporate and SME clients.

“Our outlook is based on the UAE now firmly being on a recovery trend, post the financial crisis, and particularly after the consolidation of the property market. Indicators clearly show that general market confidence is slowly returning. Consumer confidence is showing positive trends and UAE indicators on tourism, services, industry, projects and city infrastructure are returning to significant levels. People and institutions are benefiting from increased financial stability. Expatriates and investors are starting to look at the UAE again as a key destination. All these factors combine to stimulate the core SME platform,” Seetharaman said.

“In the first quarter of 2013, for example, the Dubai Department of Economic Development said there were 26,577 commercial license renewals and 4,032 new applications in the emirate alone.

“With Abu Dhabi being one of the leading current destinations in the region for foreign investment, we expect new commercial licensing figures in Abu Dhabi to be along the same proportions against existing businesses. Based on trends in the UAE, a large proportion of these entities can be considered small or medium private businesses vying for market share in this highly competitive environment and seeking advanced partnerships with banks and groups of advisers,” he said.

“SMEs have only recently transitioned as a primary focus area for banks in the region and this has been mainly due to government stimulus and incentives for financial institutions to support this high-risk-high-rewards segment in many parts of the GCC. In the UAE, Doha Bank sees significant organic opportunities, without external stimulus involved in the SME market which plays a pivotal role in the non-oil economy. And due to the strategic location of both Abu Dhabi and Dubai at the heart of this vibrant economic region, we envision growth across a number of sectors including industrial and semi-industrial or manufacturing businesses, infrastructure and construction businesses, consulting sectors and key commercial trade areas.

“Companies in these sectors are always looking to prove their competitiveness by leveraging economies of scale and knowhow which often requires investment in facilities and skill, coupled with key advisory and financial services covering day-to-day liquidity management, short- and medium-term financial solutions, project-based advisory, transaction structuring solutions and, perhaps in the not too distant future, offer greater equity stakes and raise core capital via alternative and primary investment bourses,” added Seetharaman.

Seetharaman said: “We are looking to participate in this sector which has significant opportunities for GCC-based financial institutions. Both Abu Dhabi and Dubai are markets where we are seeking clientele that exemplify quality more than quantity. There are some major sectors such as property and projects development that are still very much underserved from a global advisory perspective including risk advisory, green development standards and corporate liquidity solutions that are based on an ongoing partnership with the client and bringing together a team of expert consultants to meet their needs and mitigate a wide range of risks, as opposed to just a lending-based mandate.

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