UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi urged banks to boost lending to small and medium enterprises (SMEs) as they create new job opportunities and are catalysts for growth in the economy.
“There is no doubt that economic and banking cooperation has a special importance at this stage. Small projects provide job opportunities in the economy and this largely supports economic security through providing a main source of income for an individual or family and enhances economic movement,” Al Suwaidi said in his address to the Arab Banking Conference 2012 in the capital.
The two-day conference is discussing challenges to Arab economic security.
Al Suwaidi added: “Therefore banking legislations which our central banks place should support loans and should provide banking facilities in this field, no matter how small. As an example, we could benefit from India’s experience in the legislation of the so-called “priority sector lending”.
Al Suwaidi said placing the foundations for enabling securing properties such as farmlands, will make available a large amount of land which could be used in a profitable way in agricultural countries.
“This will provide funding for banks through companies which will revitalize agricultural production or agro-industries; in addition to providing job opportunities and minimizing the need for importing,” Al Suwaidi said.
He also said that to enhance the movement of trade in Arab countries, there has to be development in various means of transportation and this will require a lot of investment from participating logistics companies and roads and train tracks.
“These projects will also provide funding opportunities for banks and job opportunities for the Arab youth and will increase motion in the economy.” Al Suwaidi said.
Dr Josef Tarabay, Head of the Union of Arab Banks, said at the conference winds of change are passing through the entire region, Gulf News reported.
“The global financial crisis and after it the European debt crisis have revealed the fragility of the global financial system. This is what provides the positive opportunity for the prosperity of the Arab financial sector through reshaping the revolutionary movements of Arab finances,” Tarabay said.
He said the region’s banks have a “healthy skeleton and competent managements capable of participating in creating a new role for them which has a greater effectiveness in attracting Arab financial resources and managing them and utilizing them in Arab economies.”