Abu Dhabi is introducing a Dh6 billion supply chain financing initiative to back a variety of sectors as part of its efforts to support small and medium enterprises (SMEs).
The first phase of the Abu Dhabi Department of Finance (DoF) initiative, which aims to provide liquidity to SMEs in the healthcare sector, will be delivered by National Health Insurance Company (Daman) and First Abu Dhabi Bank (FAB), it said in a statement on Sunday.
"As part of our forward-looking fiscal sustainability strategy, we are proactively launching this initiative in order to underpin continued liquidity for SMEs in Abu Dhabi," Jassem AlZaabi, chairman of the Abu Dhabi DoF, said. "SMEs are the lifeblood of the economy, and key to long-term sustainable growth for the emirate of Abu Dhabi."
Funded through the Ghadan 21 programme's SME Credit Guarantee Scheme, the initiative will boost liquidity for SMEs and allow them to sustain their activities during the Covid-19 pandemic and beyond, the statement said.
SMEs account for 98 per cent of all companies in Abu Dhabi, making them a key pillar of the emirate's economy and diversification strategy. In 2019, SMEs in the capital accounted for 29 per cent of gross domestic product and 44 per cent of the non-oil economy, according to the Abu Dhabi Chamber.
While the new funding initiative will initially support healthcare SMEs, it will be extended to include other sectors and banks, the DoF said.
"This initiative will provide SMEs in the emirate with the necessary liquidity to continue their sustainable growth while maintaining healthcare supply chains throughout the Covid-19 pandemic response and beyond," André Sayegh, group chief executive of FAB, said.
Abu Dhabi SMEs have made vital contributions to the healthcare sector, Hamad Al Mehyas, chief executive of Daman, said.
The UAE, and Abu Dhabi specially, has taken several measures to cushion SMEs from the impact of the coronavirus and safeguard their cash flow.
Last year, the Abu Dhabi government offered rent rebates for select businesses in the private sector. Nurseries, dental clinics, hair salons, restaurants, entertainment and tourism outlets were offered a discount of up to 20 per cent on their rents.
The emirate also introduced a stimulus package in March to help small businesses through the pandemic.