The UAE’s Emirates Development Bank (EDB) and Saudi Arabia’s Social Development Bank are in talks to expand collaboration to support companies and entrepreneurs as they seek to diversify their economies.
The move comes after a high-level delegation from the kingdom’s Social Development Bank visited the EDB, the Abu Dhabi-based lender said in a statement on Thursday.
The UAE and Saudi Arabia “have strong trade and economic relations, accounting for more than half the region’s imports and exports”, Ahmed Al Naqbi, chief executive of EDB, said. “As banks, we have a responsible role to play in this development process by creating more opportunities for commercial and investments across both the countries.”
EDB, founded in 2011, through a merger of Emirates Industrial Bank and Real Estate bank, is playing a key role in supporting the UAE's manufacturing sector through financing programmes. It has allocated Dh30 billion ($8.16bn) to fund more than 13,500 SMEs, start-ups and corporates in priority sectors in the next decade.
The lender has been active in forging local partnerships. Last October, it signed an agreement with the Abu Dhabi Investment Office to further boost foreign direct investment and attract more businesses to the capital. A month earlier, it teamed up with Ajman Free Zone to support the development of Emirati-led SMEs.
It also signed a preliminary agreement with Dubai Islamic Bank to offer a credit guarantee for small and medium enterprises in the UAE's priority sectors last month. As a part of the deal, DIB will offer up to Dh10 million to SMEs, with half of it being guaranteed by EDB.
“The visit of Saudi Arabia’s Social Development Bank is part of our efforts to exchange our knowledge and experiences with our partners in other countries,” Mr Al Naqbi said.
“We presented our strategic roadmap and its envisioned goals with the SDB team and explored opportunities to collaborate on joint projects, including innovation, to ensure economic prosperity across both the UAE and KSA.”
Saudi Arabia and the UAE have an ambitious diversification strategies and are investing heavily to develop their non-oil sector to boost growth. The kingdom is developing projects across sectors including real estate, petrochemicals, transport and hospitality to attract investment and boost employment.
Last year, the UAE unveiled a new industrial strategy to boost the contribution of the industrial sector to Dh300bn in the next 10 years from Dh133bn.
The country also overhauled its commercial companies law to attract more foreign capital and annulled the requirement for onshore companies to have an Emirati shareholder to boost growth.