UAE SMEs proceed to indicate resilience, however confidence drops marginally 

UAE SMEs present resilience

The Index relies on insights from over 1,200 UAE-based SMEs. Accomplished in partnership with RFI World, the information was collected between October and December 2024.

Optimism stays regular, with over two-thirds (68 per cent) of SMEs viewing the long run enterprise setting as beneficial, and greater than 60 per cent reporting income progress over the previous two years. The general trajectory alerts adaptability and optimism amongst SMEs as they navigate the evolving enterprise panorama, regardless of challenges comparable to rising operational prices, company tax implementation, and excessive borrowing prices.

Raheel Ahmed, Group Chief Govt Officer of RAKBANK, stated: “We launched the RAKBANK RFI SME Confidence Index in 2024, and this reinforces our dedication to the UAE’s dynamic SME sector.

“The Index supplies well timed insights into SME sentiment, challenges, and progress outlook throughout the nation. Small and medium enterprises are the spine of each thriving economic system, and within the UAE, they play a central function in driving diversification and sustainable improvement.

“At RAKBANK, we proceed to strengthen our dedication to be a trusted companion on their journey, offering the insights, instruments and assist they should develop their companies and contribute to the broader economic system.”

Among the many tendencies shaping the SME sector in 2025, the survey discovered that the Shopper & Retail Providers sector stays the highest-performing, pushed by a continued rise in shopper spending and the profitable adoption of recent enterprise channels. It additionally confirmed that the SMEs, throughout industries, are prioritising product innovation and market enlargement as key methods for progress.

Shopper & Retail Providers SMEs achieved a sector confidence rating of 60, Development & Manufacturing was at 57, Transport (57), and Buying and selling (58) had been a number of the sectors that remained regular in confidence. Public Providers and Skilled Providers noticed notable declines to 56, largely resulting from elevated prices and decrease confidence in debt servicing.

Key takeaways:

• The Index rating decreased barely in 2024, nevertheless it nonetheless alerts optimistic sentiment throughout the board.
• Greater than three in 5 SMEs reported a rise in annual income over the past two monetary years.
• SMEs with income as much as AED30 million posted the best confidence rating at 58, whereas bigger SMEs (AED30-100 million) dipped to 55.
• Over two-thirds of SMEs skilled larger operational prices. Solely 39 per cent expressed confidence in assembly debt obligations, down from final 12 months.
• Digital adoption is on the rise and 22 per cent of SMEs now promote their services or products on-line, and 45 per cent use digital banking channels month-to-month.

The challenges

UAE SMEs are additionally navigating boundaries comparable to elevated prices of doing enterprise, rising demand for credit score, aggressive pressures, and adapting to the company tax regime launched in 2024.

To handle these points, many SMEs are investing in know-how, operational efficiencies, and sustainability methods aimed toward long-term progress.

“What’s particularly encouraging from the survey, is the sector’s forward-looking mindset. We’re seeing elevated give attention to getting into new markets, investing in expertise, and modernising fee infrastructure,” the report stated. “At RAKBANK, we see our function as a companion in that journey, offering not simply monetary options but additionally the advisory assist wanted to assist them develop with confidence.”