The UAE Banks Federation’s initiative to help small and medium businesses rescued 1,700 companies that held loans from UAE banks valued at Dh7 billion, AbdulAziz Al Ghurair, Chairman of the UAE Banks Federation, said on Monday.
The CEO Advisory Council of the UAE Banks Federation, the professional body representing 49 banks in the UAE, “discussed Modus Operandi” at its third meeting of the year. Under the plan, which was first announced in January, lenders setup a process to enable companies to reschedule their debt and continue business as usual.
In the last quarter of 2015, the UBF estimated that loan impairments in the SME portfolio could be in the range of Dh5-7 billion. The organization indicated that loans to small enterprises amounted to 3-5 per cent of the total balance sheet, and 60 per cent of the clients were in the food, oil and gas sectors.
The group also discussed he recent approval by the UAE Cabinet of a UAE bankruptcy law.
The Council welcomed the progress made in bringing the bankruptcy law into force and said it will be mutually beneficial to both to banks and owners of businesses, especially SMEs.
Members of the Council acknowledged the significance of the SME sector to the UAE economy and noted the important role that bankruptcy law are playing in other dynamic economies around the world. They also recognized that the existence of a bankruptcy law is a critical factor in both stimulating new entrants to the SME sector, as well as inward investment from overseas.
“We commend and welcome the legislation of the bankruptcy law, which the government has recognized as a pre-requisite to the country’s future economic development, and as an essential tool to maintain the well-being of the business and environment economy,” Al Ghurair said.
The UBF also focused on other areas in which we can make a contribution for the same objective – namely to help build as strong and resilient an economy for the UAE as possible. ”
The meeting addressed also the progress so far on the work done in preparation for the Federation’s 4th Middle East Banking Forum, which is due to take place in Abu Dhabi on November 14.