Qualitative analysis into liquidity management by SMEs in the UAE

Abstract

Small and Medium Enterprises or commonly referred to as SMEs are an important component of any nation. In the UAE, SMEs account for a large bulk of economic trade as well as provide invaluable job opportunities. Liquidity management is predominantly a key component for the long-term sustenance of any business, let alone SMEs. Lack of persistent liquidity could swindle the business model of the SMEs and could have pernicious effect on doing business in the region. The sinister effect of lack of effective liquidity management tools could be disastrous for the industry as a whole. Hence managing liquidityboth long term and short term, is imperative, especially when sources of liquidity are limited. This paper is an attempt to explore liquidity avenues for SMEs and how do SMEs manage their day-today liquidity to meet the going concern requirements. The paper will involve qualitative analysis that involves semi structured interviews with certain SMEs to gauge liquidity management by SMEs in the UAE.