26 Nov 2025

In the UAE, we often hear that small and medium enterprises (SMEs) are widely viewed as the backbone of the national economy due to their dominant share of business activity. According to the Abu Dhabi Department of Economic Development (ADDED), 98% of businesses in Abu Dhabi are SMEs, representing 46% of the workforce and contributing 42.8% to non-oil GDP.

SMEs also make up the majority of exporters and importers in the UAE’s non-oil economy. However, by engaging internationally, they can often face payment and credit risks when trading, especially with new or emerging markets.

As many of these businesses may not necessarily have the large financial buffers that big corporations do, market volatility, political risk, or even a single unpaid invoice can severely impact their liquidity. That’s why trade finance serves as a protective tool—it safeguards payments and helps to stabilise cash flow.

Here’s how it works: when a company ships products to a buyer, it can insure the transaction through a trade credit insurer. If the buyer fails to pay due to insolvency, default, or political issues in their country, the insurer reimburses most of the loss (typically up to 90%).

Essentially, this protection not only secures the seller’s cash flow but also makes banks more willing to provide financing, since the invoices insured act as reliable collateral. In short, it helps companies trade confidently while safeguarding themselves from payment and country risks.

For UAE businesses approaching or engaging with international trade, it can transform trade from a high-risk venture into a more structured and secure business opportunity.

With such a significant and powerful presence in the UAE economy, we believe SMEs should be empowered and also protected through trade finance insurance. It’s for this very reason that, as the nation’s largest insurer, ADNIC has joined a new partnership with Allianz Trade to deliver trade credit insurance solutions.

At ADNIC, we’re glad to play a facilitating role in supporting sustainable economic growth and encouraging responsible credit management practices that contribute to the country's economic development.