There will continue to be a need for syndicated loans in the Middle East, despite the low volumes of deals recorded in the region this year to date.

“In some markets you are seeing more bilateral or club deals than syndicated loans. The loan market continues to play an important role in financing the real economy,” says Nicholas Vosiey, director at the London-headquartered industry body Loan Market Association (LMA).

Voisey was speaking to MEED ahead of the LMA’s annual training seminar being held in Dubai on 4 June with banks and other entities.

The LMA’s role is to promote loans as a key debt product and improve the liquidity and transparency of the market. It is aiming to increase membership among financial institutions and law firms based in the Middle East.

“We have got more [regional members] and we are looking to get more,” he says.

In the first quarter of this year, a total of $7.21bn-worth of syndicated loans were signed in the Middle East and North Africa (Mena) region, according to data from UK-based data provider Dealogic. That is less than half the volume of loans signed in the first quarter of 2013.

Voisey says the low level of loan activity in the region and in the LMA’s other key markets, such as Europe, is partly due to the lack of large mergers and acquisition (M&A) deals closed to date this year.

Yet, current market conditions are far more favourable for borrowers than they have been in the past few years.

“Banks appear relatively liquid and willing to lend,” he says.