By Elsa Baxter
Banks are urged to relax lending criteria to boost country's building sector - MAG chief.
The UAE construction sector is being stifled by a lack of lending to small businesses, the head of a Dubai-based developer has said.
Mohammed Nimer, CEO of MAG Group Property Development, said small-to-medium-sized businesses (SMEs) were a driving force behind the country’s office and residential property market, but are being restricted by a lack of liquidity.
If banks eased their lending policies, he said, granting lengthier terms and better interest rates, the results would help drive demand in the property sector.
“More needs to be done to unlock the potential of the SME sector, banks must relax their lending criteria, SMEs are the backbone of many developed economies and they hold the key to real economic growth in the UAE,” Nimer said in a statement.
“Imagine the stimulus to the housing market alone if each SME averaged just one new employee per annum, not to mention the benefits to the wider economy – airlines, hotels, restaurants, shopping and so on,” he added.
Nimer agreed that confidence needed to be restored in the country’s building sector, but maintained that liquidity was at the root of the problem and would continue to play a critical role.
“The Dubai real estate market in particular has witnessed the more unsavoury side of property development,” he said. “Financial irregularities, land ownership disputes, cancelled and delayed projects and poor quality finishes.
“Owners and staff of new small businesses with aspirations as owner-occupiers will still need mortgages,” he said.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.