The 2025 RAKBANK SME Confidence Index is out and shows that the UAE’s Small & Medium Enterprise (SME) sector continues to show resilience and build on the momentum in recent years, despite a marginal drop in the overall Index score by four points.
Measured against a base score of 50, the findings reflect a stable and optimistic sentiment against a dynamic economic environment.
The SME Confidence Index score for the UAE in 2024 was 57, a 4-point drop from 61 in 2023.
UAE SMEs show resilience
The Index is based on insights from over 1,200 UAE-based SMEs. Done in partnership with RFI Global, the data was collected between October and December 2024.
Optimism remains steady, with over two-thirds (68 per cent) of SMEs viewing the future business environment as favourable, and more than 60 per cent reporting revenue growth over the past two years. The overall trajectory signals adaptability and optimism among SMEs as they navigate the evolving business landscape, despite challenges such as rising operational costs, corporate tax implementation, and high borrowing costs.
Raheel Ahmed, Group Chief Executive Officer of RAKBANK, said: “We launched the RAKBANK RFI SME Confidence Index in 2024, and this reinforces our commitment to the UAE’s dynamic SME sector.
“The Index provides timely insights into SME sentiment, challenges, and growth outlook across the country. Small and medium enterprises are the backbone of every thriving economy, and in the UAE, they play a central role in driving diversification and sustainable development.
“At RAKBANK, we continue to reinforce our commitment to be a trusted partner on their journey, providing the insights, tools and support they need to grow their businesses and contribute to the wider economy.”
Among the trends shaping the SME sector in 2025, the survey found that the Consumer & Retail Services sector remains the highest-performing, driven by a continued rise in consumer spending and the successful adoption of new business channels. It also showed that the SMEs, across industries, are prioritising product innovation and market expansion as key strategies for growth.
Consumer & Retail Services SMEs achieved a sector confidence score of 60, Construction & Manufacturing was at 57, Transport (57), and Trading (58) were some of the sectors that remained steady in confidence. Public Services and Professional Services saw notable declines to 56, largely due to increased costs and lower confidence in debt servicing.
Key takeaways:
- The Index score decreased slightly in 2024, but it still signals positive sentiment across the board.
- More than three in five SMEs reported an increase in annual revenue over the last two financial years.
- SMEs with revenue up to AED30 million posted the highest confidence score at 58, while larger SMEs (AED30-100 million) dipped to 55.
- Over two-thirds of SMEs experienced higher operational costs. Only 39 per cent expressed confidence in meeting debt obligations, down from last year.
- Digital adoption is on the rise and 22 per cent of SMEs now sell their products or services online, and 45 per cent use digital banking channels monthly.
The challenges
UAE SMEs are also navigating barriers such as increased costs of doing business, rising demand for credit, competitive pressures, and adapting to the corporate tax regime introduced in 2024.
To address these issues, many SMEs are investing in technology, operational efficiencies, and sustainability strategies aimed at long-term growth.
“What’s especially encouraging from the survey, is the sector’s forward-looking mindset. We’re seeing increased focus on entering new markets, investing in talent, and modernising payment infrastructure,” the report said. “At RAKBANK, we see our role as a partner in that journey, providing not just financial solutions but also the advisory support needed to help them grow with confidence.”
