Emirates Development Bank (EDB), the state owned lender, signed an agreement with Dubai-based Beehive to boost funding to small and medium-sized enterprises in priority sectors in the UAE.
As part of the deal, Beehive, a peer-to-peer platform will provide loans to "creditworthy" SMEs looking to expand their operations or improve working capital through Dh30 million ($8.16m) of funding allocated by EDB, Wam reported on Sunday, citing a statement by EDB.
"The collaboration with Beehive is part of our mission to bridge the funding gap by offering SMEs greater and easier access to financial sources,” 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 addition of institutional investors to Beehive will give SMEs more secure financing and better liquidity on the platform, which means that funding can be received faster too,” Craig Moore, founder and chief executive of Beehive, said.
Hundreds of SMEs in the region are expected to benefit due to the new partnership, according to the statement.
The Beehive platform uses the method of crowdfunding to connect SMEs with investors who are looking to finance such ventures.
Small businesses or start-ups usually raise money through crowdfunding to start new ventures or secure growth capital to increase scale.
The global crowdfunding market is estimated to triple to $39.8bn in 2026, from $13.9bn in 2019, according to Statista research data. The concept, which originated in the US, is gaining traction in the GCC too.
EDB also signed two separate agreements with RAKBank as well as Commercial Bank of Dubai this month to offer credit guarantees and participate in co-lending programmes to small and medium-sized enterprises in priority sectors in the UAE recently.
"The EDB strategy aims to help SMEs to access finance and grow their business, which should boost their contribution to UAE’s non-oil GDP to over 70 per cent by 2021, besides enhancing in-country value, productivity and employment," the statement said.
