Emirates Development Bank signed a memorandum of understanding with RAKBank to offer credit guarantees and participate in co-lending programmes to small and medium-sized enterprises in priority sectors in the UAE.
RAKBank will offer loans of up to Dh10 million ($2.72m) to SMEs, with 50 per cent either guaranteed or co-lent by EDB, the two banks said in a statement on Tuesday.
“Our MoU with RAKBank will help in bridging the funding gap for SMEs in key sectors, which will not only strengthen the SME ecosystem but also pave the way for building a robust economy,” Ahmed Al Naqbi, chief executive of EDB, said.
EDB was founded in 2011 after a merger between the Emirates Industrial Bank and the Real Estate bank. It aims to provide Dh30 billion in financing over the next five years to support the UAE's efforts to more than double the size of its industrial sector by 2031. It will fund industries such as healthcare, infrastructure, food security and technology and help generate 25,000 jobs.
“The development of the national economy is a top priority at RAKBank and this partnership exemplifies that by supporting priority sectors in the country,” Peter England, chief executive of RAKBank, said.
The programme also aims to offer loans of up to Dh1m to Emirati entrepreneurs, whereby 60 per cent will be guaranteed or co-lent by EDB, the lender said.
In April, EDB said it will partner with five banks to boost lending and support the growth of the country's industrial sector.
Last week, it signed a similar agreement with the Commercial Bank of Dubai to offer credit guarantees and co-lending to SMEs in priority sectors.