The UAE's small and medium-sized enterprise (SME) sector is transforming rapidly, driven by technological innovation, government initiatives, and a shift towards a broader range of industries.

Once centred around business sectors like trading and construction, the SME landscape has diversified to include fintech, e-commerce, and healthcare. This shift reflects a broader regional trend, with economies across the Middle East focusing on economic diversification to reduce reliance on oil. In this new environment, Mashreq Bank has emerged as a leader in addressing the unique needs of SMEs, providing tailored financial services and digital solutions that support their growth.

One of the biggest challenges SMEs face in the region is timely access to essential banking services. For instance, opening a basic business bank account could take 90 days. Mashreq has tackled this head-on with its SME-focused digital platform, NEO BIZ, enabling companies to open accounts entirely digitally in as little as three days.

Access to financing has posed another significant hurdle for SMEs, mainly due to the limited formal data available to assess creditworthiness. Given these data challenges, many banks have traditionally been reluctant to lend to SMEs. Mashreq has adopted an innovative approach by leveraging alternative data from bank statements, point-of-sale systems, and e-commerce platforms.

"Mashreq is now able to give an in-principle loan approval for a merchant loan, completely digitally, in less than 15 minutes," said Rajeev Chalisgaonkar, group head of business banking at Mashreq and head of NEO BIZ.

This has become possible as SMEs increasingly adopt digital tools, enabling banks to use rich data sources and advanced technology to assess credit risks more accurately and efficiently.

Additionally, the NEO BIZ platform offers value-added services to ease the administrative burden on SMEs, enabling them to access various applications, from accounting to payroll, human resources, and digital marketing tools. This comprehensive support structure allows entrepreneurs to focus more on scaling their businesses.

Moreover, trade finance remains a critical area for SMEs, particularly those in the UAE, given the country's status as a global trade hub.

Recognising trade finance as essential for SME cash flow, Mashreq is advancing digital solutions that allow SMEs to access funds affordably using their invoices.

"We are working on digitising trade finance so that the receivables of SMEs can be used as security by their lenders in a low-cost way," said Chalisgaonkar.

As 'tokenisation' initiatives expand across the region, Mashreq’s SME-focused approach prioritises affordability and accessibility. Tokenisation replaces sensitive data with secure tokens.

Islamic finance is another core area where Mashreq has tailored its services to meet demand, mainly as Shari'ah-compliant financing grows in importance in the UAE and the broader Middle East. Islamic finance in the UAE spans banking, insurance (Takaful), and asset management, as traditional banks have introduced Shari'ah-compliant windows or have even converted to Islamic banking models.

Global Islamic finance assets are projected to exceed $6.7 trillion by 2027, growing at a robust 8% annually, according to the ICD-Refinitiv Islamic Finance Development Indicator report.

"At Mashreq, we’ve made Islamic finance a core part of our business banking to meet the growing demand for Shari’ah-compliant solutions, especially among SMEs," said Chalisgaonkar.

Its integration of open banking technology a secure data-sharing system between banks and third-party providers — enables smooth transactions aligned with Islamic principles like transparency and ethical risk-sharing.

Beyond banking, the bank partners with government entities and the private sector to create a supportive ecosystem for SMEs, improving access to finance, expanding digital payment solutions, and providing training that equips small business owners with essential competitive skills.

"We are actively partnering with government entities and private sector stakeholders to create a more conducive environment for SMEs," said Chalisgaonkar. These partnerships ensure that SMEs survive and flourish, particularly during economic uncertainty.

Furthermore, financial literacy has been identified as an area needing support, as many SMEs face challenges due to a lack of understanding about financial products and services. In response, Mashreq Bank has introduced initiatives to improve financial literacy among small business owners, empowering them to make informed decisions that can drive their growth.

SMEs in the UAE and the broader region face unique challenges, from gaining access to finance to managing administrative burdens. Mashreq tackles these issues head-on through digital innovation, alternative data, and tailored financial solutions. As the SME sector continues to expand and diversify, its commitment to providing the necessary support ensures that entrepreneurs have the tools to overcome challenges and seize opportunities.