Business

RAKBANK has unveiled its 2025 SME Confidence Index, offering an insightful snapshot into the state of the UAE’s small and medium enterprise (SME) sector. Despite global economic pressures, the study—developed in collaboration with RFI Global—shows a resilient and forward-looking SME community in the UAE.

Surveying over 1,200 SMEs across the Emirates between October and December 2024, the Index recorded a score of 57, based on a baseline of 50. Although this reflects a slight dip from the 2023 score of 61, it still indicates a stable and optimistic business sentiment across the sector.

Sustained Confidence and Revenue Growth

Over 68% of SMEs expressed a favorable outlook for the future business environment, while more than 60% reported consistent revenue growth over the past two years. This steady optimism comes in spite of various economic hurdles, including increased operational costs, the implementation of corporate tax, and higher borrowing rates.

Commenting on the findings, Raheel Ahmed, Group CEO of RAKBANK, stated,

“This has been a milestone month for our Business Banking Group. Since launching the RAKBANK RFI SME Confidence Index in 2024, we’ve committed to providing actionable insights and tailored support for SMEs across the country.”

Ahmed also highlighted the bank’s recent accolade as the Best Bank for SMEs in the UAE at the Euromoney Awards for Excellence 2025. He further referenced a significant AED 1 billion co-financing partnership between RAKBANK and Emirates Development Bank, announced at the “Make it in the Emirates” forum under the Ministry of Industry and Advanced Technology’s patronage.

Sector Performance and Emerging Trends

The report identifies Consumer & Retail Services as the leading sector in 2025, driven by growing consumer spending and successful digital transitions. This segment posted a confidence score of 60, followed by Trading (58), Construction & Manufacturing (57), and Transport (57). Public and Professional Services sectors trailed slightly with scores of 56, largely due to higher operational costs and reduced confidence in debt servicing.

Additional key insights include:

• SMEs with annual revenues up to AED 30 million registered the highest confidence score at 58, while larger SMEs (AED 30–100 million) scored 55.

• 67% of SMEs reported increased operational costs, and only 39% expressed confidence in meeting debt obligations, a decrease from last year.

• 22% of SMEs now sell products or services online, and 45% use digital banking services monthly.

• 55% of SMEs are either engaged in or preparing for a sustainability journey, with 1 in 3 identifying it as a short-term business goal.

Navigating a Complex Landscape

Despite the challenges posed by the evolving corporate tax landscape and intensifying market competition, SMEs are investing in technology, digitalization, and sustainability to future-proof their operations. RAKBANK’s report reinforces the importance of tailored banking solutions, with many SMEs citing financial institutions as critical to their ongoing success.

“Our role extends beyond banking,” Ahmed added. “We are committed to offering the insights, advisory, and support systems that SMEs need to expand into new markets, attract talent, and modernize operations.”

As the UAE continues to position itself as a global business hub, the findings underscore the resilience and adaptability of its SME sector, reinforcing their pivotal role in the country’s economic diversification and sustainable development efforts.

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