Mena SMEs face $240bn financing gap
Manama, May 18, 2014
The small and medium enterprises (SMEs), which play a vital role in the Mena region's economy, are finding it difficult to get access to funding and face a financing gap of Dh881 billion ($240 billion), said a report.
Nearly 63 per cent don't have access to finance and it has become a major challenge for the SMEs in the region, reported Emirates24/7, citing a financial expert.
A survey of more than 130 Mena banks shows that only eight per cent of lending goes to SMEs across the region, and even less in GCC countries at two percent, stated Massimo Falcioni, the CEO of Euler Hermes, a global trade credit insurance company based in Dubai.
"This is substantially lower when compared to the middle income countries lending average of 18 percent and high-income countries average of 12 percent," he said citing a recent World Bank study.
"A recent study from DMCC has confirmed this and reported that 45 per cent of its members registered in the Free Zone need substantial funding. Only around 36 per cent have access to funds, and of these, only 33 per cent are fully funded by local banks," he added.