UAE’s EDB, Emirates Islamic partner to support SMEs
Now Reading
Emirates Development Bank, Emirates Islamic partner to support SMEs

Emirates Development Bank, Emirates Islamic partner to support SMEs

The Islamic lender is the 11th commercial bank to join EDB’s credit guarantee scheme platform

Avatar
EDB, Emirates Islamic partnership

UAE’s Emirates Development Bank (EDB) and Emirates Islamic have signed an MoU to collaborate on a joint credit guarantee scheme to support the financial inclusion of small-to-medium enterprises (SMEs) in the country.

Emirates Islamic is the 11th commercial bank to join EDB’s credit guarantee scheme platform offering favourable financing solutions to SMEs.

Over the years, the development bank has signed credit guarantee agreements with several UAE lenders including Abu Dhabi Commercial Bank, the National Bank of Umm Al Qaiwain and First Abu Dhabi Bank.

“EDB remains committed to enhancing our nation’s SME ecosystem and supporting the sustainable economic development of the nation, specifically the five key priority sectors,” said Ahmed Mohamed Al Naqbi, CEO of Emirates Development Bank.

Al Naqbi welcomed Emirates Islamic to the development bank’s growing group of commercial bank partners, which aims to facilitate access to financing for the SME.

EDB and Emirates Islamic agreed to collaborate to identify opportunities to enhance their banking solutions. EDB agreed to guarantee 50 per cent of the finance facility extended to eligible SMEs by Emirates Islamic as part of the credit guarantee scheme deal.

“SMEs are a key driver of Emirates Islamic’s growth strategy and we offer a wide range of business banking products and services tailored to meet the needs of companies in this critical sector,” Salah Mohammed Amin, CEO of Emirates Islamic said in a statement.

EDB drives SMEs growth

Meanwhile, the EDB’s mandate includes the provision of Dhs30bn in financing towards the development of the UAE’s economy in five strategic sectors by 2026 – Dhs5m is to be allocated through credit guarantee schemes.

The development bank approved Dhs6.1bn in financing in 2022, up 673 per cent compared to the previous year. EDB approved Dhs1.8bn in financing to SMEs last year, which jumped 87 per cent compared to 2021 and a 45 per cent increase from the previous quarter.

Read: Emirates Development Bank’s financing sees 673% YoY rise in 2022; here’s how much it gave as loans

The financing comprises Dhs1.2bn in direct financing and Dhs611m indirect financing through EDB’s credit guarantee scheme with partner commercial banks.

The development bank is playing a central bank role in supporting the UAE economic development agenda and is at the forefront of the government’s efforts to develop its non-oil economic and industrial base. It is also a financial enabler of the country’s economic diversification and industrial transformation agenda, toward building a knowledge-based economy.

EDB, Emirates Islamic signs MoUThe bank’s ‘EDB Strategy’, which was approved by the UAE government, will see the state-run lender providing financial aid to the country’s priority industrial sectors until 2025.

The bank works in collaboration with state entities including the Ministry of Industry and Technology and free zones such as Dubai Industrial City and Jebel Ali Free Zone As well as KEZAD and ZonesCorp in Abu Dhabi to provide financing to their clients.

SMEs make up around 95 per cent of all companies operating in the UAE, they create 90 per cent of jobs in the private sector and contribute more than 60 per cent to the country’s GDP, according to data on the UAE government website.

Last November, the UAE government launched the Entrepreneurial Nation 2.0 initiative to develop more than 8,000 SMEs and startups by 2030.

The first edition of the initiative was set up in November 2021 and included 10 programmes and an estimated Dhs20m contributed by entities from the private sector.

Read: UAE’s Investopia signs partnership with Emirates Development Bank

You might also like


© 2021 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top