UAE banks are joining forces to help boost economic prospects for SMEs in the country.
Emirates Development Bank and Emirates Islamic are teaming up to offer a joint credit guarantee scheme supporting the financial inclusion of small-to-medium sized enterprises (SMEs) in the UAE.
SME funding in UAE
Under the partnership, EDB will guarantee 50 per cent of the finance facility extended to eligible SMEs by Emirates Islamic.
Both banks will also collaborate to identify further opportunities to enhance their banking solutions.
Ahmed Mohamed Al Naqbi, CEO at Emirates Development Bank, said: “EDB remains committed to enhancing our nation’s SME ecosystem and supporting the sustainable economic development of the nation, specifically the five key priority sectors.
“We are pleased to welcome Emirates Islamic to our expanding group of commercial bank partners with the shared goal of facilitating access to financing for SMEs contributing to the UAE’s non-oil GDP.
Salah Mohammed Amin, CEO at Emirates Islamic, said: “As a home-grown Islamic financial institution, supporting the UAE’s SME sector is a top priority for Emirates Islamic and we are proud to be partnering with EDB.
“This reflects our shared commitment to supporting the growth of the segment in the UAE, as we strive to enhance the overall SME business ecosystem and make financing more accessible.”
He added “SMEs are a key driver of Emirates Islamic’s growth strategy and we offer a wide range of business banking products and services tailored to meet the needs of companies in this critical sector.”
As the UAE’s development bank, EDB’s mandate includes the provision of AED30bn ($8.17bn) in financing towards the development of the UAE economy in five strategic sectors by 2026, of which AED5m are to be allocated through credit guarantee schemes.
In 2022 EDB approved AED6.1bn in financing, representing a 673% increase over the previous year.
A total of AED1.8bn in financing was approved to SMEs for 2022, representing a 387 per cent increase over 2021 and a 45 per cent increase over previous quarter.
This comprised AED1.2bn of direct financing and AED611m of indirect financing through EDB’s credit guarantee scheme with partner commercial banks.
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