UAE SMEs Maintain Optimism Amid Economic Challenges, Reveals RAKBANK SME Confidence Index 2025

Dubai : RAKBANK’s latest SME Confidence Index indicates steady optimism among UAE’s small and medium enterprises, despite ongoing economic headwinds. Conducted in partnership with RFI Global, the report is based on insights from over 1,200 SMEs across the UAE, surveyed between October and December 2024.

The 2025 Index scored 57, slightly down from 61 in 2023, but still above the base score of 50—indicating sustained positive sentiment. Over two-thirds (68%) of surveyed SMEs remain confident about the future business environment, with more than 60% reporting revenue growth over the past two financial years.

Adapting to a Changing Landscape

Despite facing challenges such as rising operational costs, the implementation of corporate tax, and high borrowing rates, UAE SMEs continue to demonstrate resilience and adaptability.

Raheel Ahmed, Group CEO of RAKBANK, said:
“This has been a milestone month for our Business Banking Group. Our focus on supporting SMEs is reaffirmed by the launch of the SME Confidence Index and recognition as the UAE’s Best Bank for SMEs at the Euromoney Awards 2025. Our AED 1 billion co-financing partnership with Emirates Development Bank, announced during the ‘Make it in the Emirates’ forum, further underlines this commitment.”

Ahmed emphasized the critical role SMEs play in the UAE’s diversification and sustainable development, reaffirming RAKBANK’s ongoing support through tailored solutions and strategic insights.

Sector Trends and Strategic Priorities

The report highlights strong sectoral performances and key strategic focuses:

• Top-performing sectors: Consumer & Retail Services lead with a confidence score of 60, followed by Construction & Manufacturing (57), Trading (58), and Transport (57).
• Lagging sectors: Public and Professional Services saw dips to 56 due to rising costs and concerns over debt servicing.
• Revenue outlook: 3 in 5 SMEs reported growth over the past two years.
• Company size impact: Smaller SMEs (revenue up to AED 30 million) showed higher confidence (58), while larger SMEs (AED 30–100 million) scored slightly lower (55).

Key Highlights:

• Digital shift: 22% of SMEs now sell online, and 45% use digital banking monthly.
• Sustainability focus: 55% of SMEs are either committed to or planning a sustainability strategy, with one-third prioritizing it in the short term.
• Operational pressures: Over two-thirds of SMEs face rising costs, and only 39% feel confident about meeting debt obligations—down from last year.

Looking Ahead

Despite the hurdles, UAE SMEs are adopting forward-thinking strategies. From entering new markets and investing in talent to upgrading digital and payment infrastructures, the sector’s focus remains on sustainable, long-term growth.

RAKBANK’s report underscores the crucial role financial institutions play in this journey, with SMEs citing the need for personalized banking solutions and strategic guidance.

“We see our role not just as a lender but as a strategic growth partner,” said Ahmed. “By providing the right tools, advice, and financial support, we aim to help SMEs grow with confidence and contribute meaningfully to the UAE economy.”