The Dubai government’s $136 million SME push to help small business to globalise will trigger an immediate influx of entrepreneurs and top talents from around the world to either expand or set up new businesses in the emirate, before taking them global, because of the inclusivity of the initiative, experts and industry players said.
The new initiative is also expected to ignite a flurry of expansions and new product launches by existing small and medium businesses and marketplaces by taking advantage of the interest-free loans to gear up for their regional and global plans.
“I think the inclusivity of the initiative – open to all SMEs regardless of ownership nationality – is a well thought out and a highly strategic move to further cement the cosmopolitan nature of Dubai’s business landscape,” Dr Kiran Nair, Associate Professor of Marketing, Abu Dhabi University, told Arabian Business.
“The move can attract a wide array of talent and ideas into the emirate,” he said.
Dr Nair pointed out that in the long run, such inclusivity can contribute to the development of a resilient and dynamic economy, benefitting the further globalisation of the UAE economy.
Business owners from a wide range of sectors also seconded Dr Nair’s assessment and said they expect the latest government initiative to set off a flurry of expansions and new ventures by existing businesses, besides the entry of several new players and enterprises into Dubai in the short-to-medium term.
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, on Monday, launched the “Dubai International Growth Initiative”, allocating AED500 million ($136.1 million) to accelerate the expansion of small and medium-sized enterprises (SMEs) established in Dubai into global markets.
The initiative was launched by the Government of Dubai in partnership with Emirates NBD.
Dubai’s vibrant business environment has fostered the creation of numerous global success stories and inspired entrepreneurs to make a remarkable impact with their ideas and initiatives. Today, we are delighted to announce the launch of the ‘Dubai International Growth Initiative… pic.twitter.com/IMserh2HKd
— Hamdan bin Mohammed (@HamdanMohammed) January 28, 2024
Interest-free financing a big hit with Dubai businesses
Several Dubai-based entrepreneurs said the soft loan component in the new initiative will act as a major boost to the SME sector in pursuing their regional and global ambitions.
“Interest-free loans for small and medium enterprises (SMEs) in the UAE will provide an excellent opportunity for independent brands to enhance their growth and development,” Leo Dovbenko, Co-Founder of YallaHub, a leading marketplace which facilitate entry of international brands to the UAE and also helps local brands to go global, told Arabian Business.
“In fact, YallaHub also assists Dubai’s small businesses in expanding to the global market. So, it’s remarkable that our objectives align with the Emirates’ state goals for global business development, particularly regarding SME support,” Dovbenko said.
Flowwow, a global gifting marketplace, said the Dubai government’s proactive measures will lead to bolster the growth of SMEs and local makers.
“With SMEs accounting for a significant 63.5 percent of the country’s non-oil GDP, initiatives like these arevital steps towards fostering innovation and economic resilience, and will help Dubai-based SMEs expand in regional and global markets, a top executive of the firm said.
Rada Russkikh, founder of Rada Russkikh and Gedonist Cosmetics brand, said establishing a business in Dubai or the UAE inevitably leads to a global outlook, as the market dynamics are inherently outward-facing.
“Access to capital is crucial for retailers, especially working capital, which fuels growth and expansion. However, Dubai has traditionally presented challenges for SMEs seeking loan financing,” she told Arabian Business.
Russkikh said, fortunately, the landscape is evolving now, with increased state-level support for SMEs, “which we eagerly anticipate utilising to fuel our business’s global ambitions”.
Dr Nair said the financing component of the initiative, provided by Emirates NBD at competitive rates, is a pragmatic measure.
“Access to affordable financing is often a bottleneck for SMEs seeking to expand. By addressing this challenge, the government ensures that these businesses have the necessary capital to invest in international ventures, research and development, and other critical expansion aspects,” the Abu Dhabi University professor said.
Dubai SMEs leverage globalisation opportunities
Interestingly, the latest announcement by the Dubai government comes amidst some of the UAE businesses such as Sanctuary, a market-leading provider of services to entrepreneurs and families in the UAE, already making moves to expand globally by joining hands with overseas players.
Sanctuary last week announced joining with the Summit Group, a globally leading independent provider of fiduciary and administrative services, in a bid to expand its footprint globally.
“We partly made the decision to do the transaction [with Summit Group] on the basis that we would have access and the ability to provide our services on a more global level,” Deepak Malhotra, CEO of Sanctuary, told Arabian Business.
“While, we did this transaction through our own resources and contacts, if this [Dubai government’s] initiative can make it easier for companies like us, it will surely benefit the further globalisation of the UAE economy,” he added.
Malhotra said with the UAE increasingly becoming a hub for start-up businesses who are looking to grow their presence internationally, this initiative will allow for more UAE SMEs to do so.