A Shuaa Capital subsidiary that specialises in lending to SMEs is keen to tap into the medical sector in the UAE and Saudi Arabia after raising Dh500 million last month.
“We are looking at having between 5 and 10 per cent of our total exposure at the portfolio level in the medical sector,” said David Hunt, the Gulf Finance Corporation (GFC) chief executive. Currently, 2 to 3 per cent of its clients are in the medical sector.
“There have been a number of hospitals and health-related initiatives in the UAE [such as]mandatory health care in Dubai, and we see the healthcare sector as very attractive.”
UAE government officials have been counting on small businesses to play a key role in the development of the economy. SMEs account for 86 per cent of the workforce in the private sector, according to the Ministry of Economy. And 300,000 companies can be classified as part of the SME sector, ministry data shows.
The company has a loan book of about Dh750m, and is looking to grow this to Dh1 billion by the end of this year through its SME financing options across Dubai, Abu Dhabi, Sharjah and the Northern Emirates as well as Saudi Arabia.
Medical equipment is one of the fastest growing segments within the sector where GFC expects small businesses to thrive. Radiology, cardiology and oncology services are in demand because of the rise in lifestyle diseases in the UAE, providing SMEs scope for further growth.
Typically, GFC offers finance leases, working capital finance and project loans of Dh250,000 to Dh5m for between six months and four years. The minimum financing of up to Dh250,000 goes to micro enterprises with a three-year bank and business record.
The private sector is increasingly investing more in the healthcare market in Dubai.
In 2012, Dh10bn was spent on healthcare projects in the UAE, of which Dh8.5bn was invested in Dubai. Of the latter, Dh5.8bn was spent in the private healthcare sector, according to Dubai Health Authority. Most of the funding went to hospitals, followed by clinics and polyclinics, and pharmacy retailers.
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