Dubai SME, a part of Dubai Economy, allocated Dh20 million to a capital guarantee scheme backing peer-to-peer loans made to small and medium businesses.
The guarantee scheme was first launched by Dubai SME's financial arm, The Mohammed Bin Rashid Fund, and lending platform Beehive to facilitate funding of up to Dh780,000 for businesses that are fully owned by Emiratis.
With the new injection, the scheme has been extended to allow Dubai-based SMEs that are 50 per cent owned and managed by Emiratis to seek funding up to Dh420,000, which will be backed by a 50 per cent capital guarantee.
"The strengths and diversity of SMEs are strategic assets for Dubai in ensuring that business activity remains uninterrupted and new opportunities are created continuously," said Sami Al Qamzi, director-general of Dubai Economy.
"The agreement between Mohammed Bin Rashid Fund for SMEs and Beehive extends the benefits of their partnership to a wider SME community and will thereby strengthen the position of Dubai as a competitive hub for business and entrepreneurship, particularly during the present global economic challenges.”
The coronavirus pandemic has led to widespread movement restrictions globally and halted air travel demand, which have in turn weighed heavily on businesses. Governments have poured in close to $8 trillion (Dh29.3tn) in economic stimulus to ease the pressure on businesses and to stem job losses.
The update to the Dubai SME scheme also allows businesses eligible for financing to enjoy a three-months payment holiday at the beginning of their loan term, which will be followed by a 24-month payment schedule.
As per their initial agreement, Beehive undertakes a feasibility study of SME projects and facilitates loans through its digital platform. Dubai SME then guarantees the loans.
“We are delighted to extend this important partnership with Dubai SME and [add] services which will allow the benefits to be appreciated by more SMEs, especially those who need it at this challenging time,” Craig Moore, chief executive of Beehive, said.