New insolvency law a safety net for SMEs, banks | GulfNews.com:
"For centuries, trust and traditional networks sustained trade and business in the Middle East. As the region transitioned into a modern economy, people here used their innate skills to build a formidable small-to-medium-sized enterprise (SME) sector. Private entrepreneurs now play a crucial role in the economy of the UAE, providing employment to large number of people across the country.
The importance of small businesses cannot be emphasised enough, contributing as they do to 60 per cent of UAE’s GDP. According to the UAE Banks Federation Annual Report-2014, financing SME activity is now vital for a burgeoning economy like ours. However, the challenge before banks, governments and entrepreneurs now is to plug various lacunae in the law, so that the UAE becomes an attractive, business-friendly destination for innovative businesspeople.
An impediment to private enterprise and a major risk for banks has been the lack of a viable insolvency law. Ironically, UAE, which is an important international financial and business hub, has functioned without effective insolvency laws, which hurt its international reputation."
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