Obstacles in the Growth of SMEs in UAE



Startups and Small and Medium Enterprises (SMEs) are gaining immense popularity in today’s economy. They are relatively easy to establish and operate. Startups and SMEs in UAE are all the rage now, just like the rest of the world.

They offer numerous benefits in enhancing the performance of the economy and setting it on the ladder of growth.

As an example, according to the statistics issued by the Dubai Chamber of Commerce and Industry, SMEs contribute 90% of jobs in the private sector. These contributions have a huge and remarkable effect on the country’s growth.

Employment is known to be the key driver of growth in GDP in any country and of course, helps in its stability.

Here are the factors hindering the growth of SMEs in UAE:

  • Financing Issues

    The biggest challenge for the development of SMEs in UAE is the availability of finance. Finance is an essential component for the development as well as running smooth operations of any company. Availability of financing for businesses is a need which UAE should meet to ensure the growth of SMEs and to fully benefit from them.

    A survey conducted by Abu Dhabi Council of Economic Development showed that 67% of the entrepreneurs said that the basic deterrent in their setting up business was the unavailability of loans and credit from the banks they approached. Banks are reluctant to provide funds to new businesses as the risk of failure is high.

  • Ineffective Business links

    SMEs act as pillars and foundations for the growing economy like a house is built on the pillars; similarly, an economy can prosper and flourish if there is a strong base of SMEs in the country.

    However, the challenge which UAE faces in setting this base is poor connectivity and networking. The businesses are not closely knitted and connected together which could provide the support to the new and upcoming SMEs. Thus, hampering the overall process of SMEs development.

  • Lack of management skills

    Another factor which acts as an obstacle to the growth of the SMEs is the lack of management skills of the entrepreneurs. As the businesses grow in size, broad skills set are required to manage the operations and the employees. Many managers specialize in a certain field but don’t have the full range of skills.


Entrepreneurs usually do not have such management capacity to tackle issues of various sorts. They have a hard time to come up with innovative strategies to further grow the business and increase organizational performance.

For that reason, we have developed the SME evolution program to help address these and other challenges. It’s a free program where any business owner can subscribe to get access to resources, tools, and support.

We hope that through the program, we will be able to remove some of these obstacles holding back the SMEs in UAE and other markets. ————

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