On new loans, UAE SMEs are not waiting for US interest rate cuts to happen: RAKBank MD

On new loans, UAE SMEs are not waiting for US interest rate cuts to happen: RAKBank MD

“These business operations are not as rate sensitive as the UAE’s bigger companies, and who might be waiting for the Fed decision.”

In broad terms, current lending rates to SMEs start from 7-7.5 per cent on average.

At the start of the year, March was seen by many analysts as heralding the likely start of the US - and UAE - interest rate drops. Now, the most likely scenario would be at the June meeting of the Fed, and then a couple of further cuts before the year is out. (At one point late last year, the sentiment was that there would be between 3-6 drops all through 2024.) UAE banks have been particularly focused on keeping the funding flows as smooth as possible. In Dubai, a special SME program is being run, whereby Emirates NBD will disburse up to Dh500 million for such businesses, whether for their expansion needs or other capital requirements. (These businesses will need to be profitable and with an operational track-record to qualify.) “What SMEs are seeking is targeted financing support, whether it’s specifically to support trade finance activity to secure shipments, etc.,” said Kunwar. “While trading continues to be a major requirements for SME