Dubai bank Emirates NBD to make it easier for VAT-registered SMEs to get loans

Dubai’s biggest bank Emirates NBD has announced the launch of a new VAT-based loan programme for small and medium-sized enterprises (SMEs) in the country.

SMEs can now apply for financing by providing copies of their VAT (Value Added Tax) returns filed with the UAE’s Federal Tax Authority to serve as validation of business turnover and income, the bank said in a statement.

The new programme will cover home loans, auto loans and business loan products.

Suvo Sarkar, senior EVP and head of Retail Banking and Wealth Management, said the move supports the objective of Expo 2020 Dubai to foster growth of the SME sector.

The lender is the official banking partner of Expo 2020 Dubai.

The UAE implemented 5 per cent value added tax (VAT) on the supply of most goods and services in the country on January 1, 2018.

The country’s Federal Tax Authority (FTA) has revealed that a total of 296,000 businesses have registered for VAT  in its first year of implementation.

Read more: First year of VAT in the UAE: FTA reveals the key details of implementation

According to official data released last year, the UAE has 350,000 SMEs, which collectively provide 86 per cent of private sector jobs and account for 60 per cent of gross domestic product.

The Ministry of Economy estimates that in Dubai alone, SMEs will account for nearly 95 percent of companies, employ 42 per cent of the workforce and contribute 40 per cent of GDP by 2021.

Also read: UAE regulator to launch SME financing platform