Dubai SME, which is part of Dubai Economy, is partnering with lending platform Beehive in an effort to allow individuals to invest in SMEs in the country.
The move will help investors “reap remarkable returns while also enabling entrepreneurs and small businesses to consolidate their gains and aim for sustainable growth”, the agency said in a statement on Sunday.
“The Beehive platform provides an innovative crowdfunding solution whereby investors can participate in supporting small businesses in a safe and secure way, beneficial for the investor and the SME,” Saeed Al Marri, deputy chief executive of Dubai SME, said.
SMEs seeking financing through Beehive are subject to an eligibility test and credit assessment, according to Dubai SME. The companies will have to provide bank statements, personal data of the owner and its audited financial statements.
“Successful SMEs will be notified on the loan amount they could obtain, tenure and the profit rate applicable,” Dubai SME said.
Generally, the loan amount is pooled from contributors within a maximum of two weeks. A single company may obtain an additional loan after the first loan is paid off, it said.
Dubai SME's partnership with Beehive comes as it looks to expand access to finance for local start-ups and SMEs.
Earlier this year, the organisation said SMEs in Dubai, fully-owned and managed by Emiratis, can obtain financing of up to Dh1 million backed by a 100 per cent capital guarantee and financed by Dubai SME’s financial arm, The Mohammed Bin Rashid Fund (The Fund) through its guarantee pool of Dh20m. SMEs in Dubai in which Emiratis have 50 per cent ownership and management rights can obtain financing of up to Dh420,000, backed by 50 per cent capital guarantees.
“The guarantee provided by The Fund contributes to motivating investors to participate in lending and supporting SMEs so that in the event of a particular company defaulting on repayment The Fund would take care of the outstanding capital and return the amount to investors,” Dubai SME said.
Dubai SME has allocated Dh25m to the capital guarantee programme that is managed by The Fund and the Beehive Platform. A total of 220 loans have been registered on this programme since the beginning of 2020 with a value exceeding Dh19m, compared to 280 loans in 2019 valued at Dh16m.