DUBAI, UAE, November 4, 2014 /PRNewswire/ --
However self-funding still the most popular finance option, according to a new SME survey from Souqalmal.com Business
Almost one third (28 percent) of small- and medium-sized enterprises (SMEs) in the UAE have taken out a business loan or any type of finance from a bank, a new survey from Souqalmal.com Business has revealed.
But among the companies polled that did secure funding from a financial institution, over half say the process was not easy.
Souqalmal.com, the Middle East's leading price comparison website, in partnership with 4SIGHT Research and Analytics, interviewed 157 SMEs in the manufacturing, service and trade sectors to gauge their attitudes towards business banking in the Emirates.
The survey ties in with the launch of Souqalmal.com Business, a new hub where SMEs can compare financial banking products.
And while almost one in three SME owners say they have signed up for a loan, self-funding a business is the most popular option. This was followed by taking out a bank loan, and then by borrowing from friends and family.
For those who did manage to secure bank funding, the most common type of loan is for trade finance or working capital, regardless of sector of business. However, equipment and commercial real estate finance are considered more important for those in the manufacturing sector, who tend to have bigger initial outlays.
CEO and founder Ambareen Musa said: "When you consider that SMEs account for 94 percent of all companies in the UAE and 90 percent of the workforce, we decided it would be interesting to find out how well their banking needs are met.
"Souqalmal.com Business fills a very important gap in the ecosystem - a place for owners, founders and CEOs to compare fees, rates and, more importantly, whether they are actually eligible."
When it comes to choosing a loan, interest rates are the deal-clincher for two-thirds of companies. The amount that can be borrowed is the second most important factor (20 percent) - closely followed by speed of approval (15 percent).
But before an SME can consider who to borrow from, it also needs a current account to manage its day-to-day business affairs. According to the survey, SMEs rely on word of mouth and personal recommendation when choosing who to bank with, proving that how a financial institution treats its clients is key to securing business from the SME business community.
This is supported by the survey's finding that low maintenance fees, online banking and good customer service are the most important considerations for an SME when choosing a business bank account.
Despite many SMEs requiring funding from external sources, a whopping 60 percent do not have a business credit card; this applies particularly to smaller companies. The majority of SME owners said they did not need a card to run their business, and one in 10 used a personal credit card for their business needs.
Souqalmal.com Business compares 70+ financial banking products, from credit cards to bank accounts to financing. It's also home to news and guides about SMEs, from comparing UAE free zones to the steps to setting up a business, as well as a series of entrepreneur guests.
Souqalmal.com (Souq al Mal is Arabic for 'money market') is the leading comparison website in the Middle East and lets you compare more than 2,800 retail banking, telecoms, insurance and education products offered by various providers in the UAE, Saudi Arabia and Kuwait before you say 'I do'.
If referencing us, please ensure you write Souqalmal.com (with S and .com)
4SIGHT Research & Analytics is one of the fastest-growing insights companies in the Middle East, with a footprint (own offices) in UAE and Saudi Arabia and acoverage footprint across MENA (Egypt, Jordan, Lebanon, Qatar, Bahrain, Kuwait, Oman, Iraq, Iran and Libya).
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SOURCE Souq Al Mal