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UAE banks to help debt-ridden SMEs

Banks in the United Arab Emirates will help SMEs in the country struggling with debt, including suspending payments and restructuring loans. A proposal in this regard was outlined by UAE Banks Federation and accepted by the banks. Many businesses in Gulf region are facing difficulties repaying hefty debts after a fall in commodity prices and a slowing economy bruising their balance sheets. Some struggling businessmen opted to depart the country, leaving behind unpaid debts. Several banks have reduced lending to SMEs after a spate of defaults. Companies owing debt to more than one bank and finding it tricky to repay will be able to restructure future payments. Payments could also be suspended while businesses reach a deal on their debt with lenders, association of the banks said. UAE Banks Federation chairman Abdul Aziz al-Ghurair said the move reflects banks’ commitment to apply a co-ordinated approach, to alleviate SME funding difficulties and continue banks’ support to the SME sector being vital to the national economy.

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