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The UAE’s Emirates Development Bank (EDB) and the Ministry of Economy have recognized and rewarded all banking and fintech partners participating in the Development Lender’s Credit Guarantee Scheme.
Education Bureau Two years on, its ambitious five-year strategy aims to empower SMEs and large corporations in five priority areas: manufacturing, technology, healthcare, renewable energy and food security. The bank has been mandated to provide AED30 billion in financing support to 13,500 companies in these sectors by 2026.
“Our aim is to create a nationwide ecosystem to finance innovation and increase bankability and financial inclusion for SMEs. This can only be achieved through partnerships,” said Ahmed Al Naqbi, Chief Executive Officer, UAE Development Bank .
The bank has launched a credit guarantee scheme to support SMEs in the UAE. The scheme aims to help these businesses overcome the challenges of obtaining financing from traditional banks by providing partial guarantees to lending banks. The guarantee comes into effect if the SME fails to repay its financing commitment.
The Credit Guarantee Scheme not only provides financial support to SMEs, but also helps them establish good credit records with banks. This can provide sustainable financing for their business into the future, ensuring long-term growth and success.
Abdullah Al Saleh, Undersecretary of the UAE Ministry of Economy, said: “The partnership has successfully demonstrated its ability to bridge the funding gap for SMEs and strengthen the UAE’s SME ecosystem, supporting the national agenda to build a strong knowledge-based economy.” .
Education Bureau’s Commitment to SMEs
At the same time, the Economic Development Bureau has cooperated with 11 commercial banks to launch a credit guarantee scheme to provide favorable financing solutions for SMEs.
These include Commercial Bank of Dubai, National Bank of Umm Al Quwain, Emirates NBD, Commercial Bank of Abu Dhabi, First Bank Abu Dhabi, Mashreq Bank, RAK Bank, National Bank of Fujairah, Dubai Islamic Bank and UAE Islamic.
The development bank is committed to supporting the growth of SMEs and promoting innovation in the UAE’s business environment. It provides digital services to SMEs in the UAE through the ‘EDB Commercial Bank’ application powered by YAP.
The app provides business bank accounts and IBANs within 48 hours, and comprehensive fast, secure and 24/7 banking services.
To further support SMEs, EDB has partnered with Beehive to integrate a new digital lending feature that allows eligible SMEs to apply for loans of up to AED5 million directly through the ‘EDB Commercial Banking’ app and receive loans within five days. Get approval or feedback. Since its launch in September 2021, the EDB Business Banking App has managed to attract 2,094 customers.
SMEs can also receive support through a range of non-financial products and services, including Business Lab, an online platform that provides free essential resources and content to help entrepreneurs at all stages of business development. Entrepreneurs can gain practical pro tips on how to solve common business challenges through short videos.
EDB offers a patient debt approach that emphasizes developmental impact. The bank’s direct and indirect financing offers long-term maturities, high loan-to-value ratios, low interest rates and interest grace periods.
The development bank approved AED6.1 billion in financing in 2022, a 673 percent increase from the previous year. The EDB approved AED1.8 billion in SME financing last year, an 87 percent increase compared to 2021 and a 45 percent increase from the previous quarter. The financing includes direct financing of AED 1.2 billion and indirect financing of AED 611 million through a credit guarantee scheme between EDB and partner commercial banks.
read: UAE Development Bank financing to rise 673% yoy in 2022; here’s how much it’s lending
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