Survey of Project Related Finance in United Arab Emirates

Abstract

This paper discusses project related finance for construction contractors operating in the United Arab Emirates. The research's assumptions and hypotheses were formulated after extensive literature searches and discussions with members of the industry. To obtain data, a questionnaire was sent to both lenders and borrowers. There were two versions of the questionnaire: one for contractors (borrowers), and the other for banks (lenders). Each version comprised two parts. Part 1 was common to both versions and contained nine assumptions on project related finance seen as suitable definitions of the subject. The respondents were requested to indicate their measure of agreement or disagreement by circling the appropriate number given. Part 2 was a survey of project related financing practice. It contained 17 questions in the borrowers' version and 21 questions in the lenders' version. Interviews were conducted with bankers and contractors. Guidelines for lenders were developed to help in the decision-making process and to help identify the areas that concern bankers most when lending to contractors. The findings, if implemented, should act as confidence building measures between contractors and bankers, whether they look for new relationships or develop existing ones, and could positively influence the opinions of bankers regarding contractors, giving industry the benefit of more stable relationships.