Abu Dhabi's e& enterprise, a subsidiary of technology and telecom company e&, has completed the acquisition of a majority stake in Dubai-based peer-to-peer lending platform Beehive, which is focused on lending to small and medium-sized businesses in the Mena region.
The company will acquire 63.3 per cent of Beehive for $23.6 million, e&, formerly known as the Etisalat Group, said on Tuesday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.
“Beehive will be consolidated into e&’s financials effective from August 2023,” the company said.
The move follows on from the deal announced in May.
It is geared to address the lending gap in the SME industry and open up a stream of growth for e& enterprise, the company said at the time.
It will also allow Beehive, which has arranged more than Dh1.5 billion ($408.4 million) worth of loans to SMEs, to scale up its business and expand its offerings.
“SMEs are important drivers of the economy and there is a need more than ever to support their unique financing needs. With Beehive, we have the right technological innovation to accelerate on our agenda in the UAE and beyond,” Salvador Anglada, chief executive of e& enterprise, said in May.
The UAE government has set up several initiatives to support the growth of SMEs and start-ups, which play a key role in a digital economy. They make up a significant portion of businesses in the UAE and are key to the country’s aim of becoming the top nation for entrepreneurship worldwide.
However, SMEs continue to face challenges where access to funding is concerned. In the GCC, there is an estimated credit gap of about $250 billion, according to global consultancy Deloitte.
The agreement between e& enterprise and Beehive “presents a huge opportunity to increase and accelerate financing to SMEs across the region”, Craig Moore, founder and chief executive of Beehive, said in May.
SMEs account for about 98 per cent of companies operating in the UAE. Developing the sector and accelerating the growth of the start-ups are priorities for the government, under its development strategy for the next 50 years.
EDB provides direct and indirect financing to start-ups, SMEs and large corporates in five priority sectors – manufacturing, infrastructure, advanced technology, food security and health care.
The company has set aside Dh30 billion for direct and indirect lending to more than 13,500 companies in priority sectors by 2025.