Emirates Development Bank (EDB) launched a Dh100 million ‘Credit Guarantee Scheme’ for small and medium-sized enterprises in the UAE.
The new facility supports the goals of the National Agenda under UAE Vision 2021, which focuses on boosting the contribution of SMEs to the country’s economy, with the aim of increasing it to 70 per cent of gross domestic product (GDP) by 2021, the lender said in a statement on Monday.
“We will continue supporting national efforts ... by introducing initiatives that will further diversify SMEs’ financing resources and thereby enable them to play a leading role in achieving economic and social development,” said Obaid Al Tayer, minister of state for financial affairs and chairman of EDB.
The new scheme, launched in coordination with partner banks and the UAE Banks Federation (UBF), aims to boost SMEs’ business activities and pave the way for economic diversity in line with the UAE’s move towards a post-oil economy.
Under the scheme, EDB will provide a credit guarantee to partner banks in the Emirates, guaranteeing the loan amount up to 85 per cent to banks which can offer up to Dh2m financing to startups. EDB will also offer up to Dh5m financing to existing SMEs where it guarantees up to 70 per cent of their loan amount.
EDB signed agreements with Commercial Bank of Dubai, RAKBank, Mashreq Bank, Al Masraf, National Bank of Fujairah and Commercial Bank International. There are plans to further expand the partnership portfolio with additional banks in the coming months.