Emirates Development Bank (EDB) held a signing ceremony on February 4th in the presence of H.E. Obaid Humaid El Tayer, Minister of State for Financial Affairs and Chairman of Emirates Development Bank, and members of the EDB Board of Directors for the launch of the new Credit Guarantee Scheme, amounting to AED 100 million in support of SMEs.
The new scheme aims to boost SMEs’ business activities and pave way for economic diversity in line with the UAE’s move towards a post-oil economy. The Credit Guarantee Scheme is part of EDB’s commitment to support the goals of the National Agenda under UAE Vision 2021, focused on boosting SMEs’ GDP contribution to reach 70 per cent by 2021.
The importance of the Credit Guarantee Scheme is that it provides strategic financing solutions to the SME ecosystem in the UAE, one of the national economy pillars.
Emirates Development Bank provides credit guarantee to partner banks in the UAE that can offer up to AED 2 million financing to startups where EDB guarantees their loan up to 85 per cent, and up to AED 5 million financing to existing SMEs where EDB also guarantees up to 70 per cent of their loan.
H.E. Obaid Humaid Al Tayer said that the launch of the first phase of the scheme dedicated to SMEs is in line with EDB’s commitment to create and offer an integrated portfolio of innovative financing products and solutions that will enhance SMEs’ access to capital, recognizing that the sector is one of the major growth drivers of the national economy, which will boost the UAE’s ranking in global competitiveness.
His Excellency further explained that the scheme provides a solid platform for emerging national companies and entrepreneurs to explore new opportunities through innovation such as smart industries, which serve the country’s efforts of building a knowledge-based economy and contribute to sustainable economic development.
H.E. added that the UAE will continue developing banking solutions that will enable SMEs to effectively contribute to increasing non-oil GDP in line with the goals of UAE Vision 2021.
H.E. emphasized: “We are committed to meet the current and emerging needs of the SME sector, which has received enormous interest and support from our wise leadership, considering it as a key pillar in driving non-oil economic growth and the foundation for a secure and sustainable future for present and future generations. We will continue supporting national efforts along this line by introducing initiatives, programs and schemes that will further diversify SMEs’ financing resources and thereby enable them to play a leading role in achieving economic and social development.
We are confident that the launch of the new scheme will be a major step forward to strengthen our leadership as a preferred banking destination for Emirati entrepreneurs, and achieve our mission to deliver sustainable financial development for both the Bank and its partners.”
H.E. Abdul Aziz Al Ghurair, Chairman of the UAE Banks Federation, noted that the Federation gives close attention to the needs of SMEs and has been developing and implementing several major banking initiatives for the sector since 2013.
His Excellency added that the launch of the new guarantee scheme to boost bank financing for SMEs is one of the most important outcomes of those initiatives, which has been the result of the cooperation between the Federation, represented by the SMEs Financing Committee, and Emirates Development Bank.
H.E. further highlighted that the Federation is committed to continue supporting the move to drive growth for SMEs that have become a major player in economic growth and sustainable economic development.
His Excellency commented: “We commend the efforts of Emirates Development Bank to support SMEs and the key contributions of this initiative to the UAE banking sector.
The UAE Banks Federation is committed to continue developing and providing solutions, initiatives and schemes that will further enhance the role of banks in the sector, which is one of the most important players in promoting business and investment in the country.”
Emirates Development Bank has signed agreements with several leading banks in the UAE, including Commercial Bank of Dubai, RAKBANK, Mashreq Bank, Al Masraf, National Bank of Fujairah, and Commercial Bank International. EDB plans to further expand their partnership portfolio by signing with additional banks as part of the Bank’s commitment towards backing up the SME ecosystem to support the goals of the National Agenda under UAE Vision 2021.
Emirates Development Bank (EDB) was established under Federal Law No. (7) of 2011 with an authorized capital of AED 10 billion. The Bank aims to contribute to the economic and social prosperity of UAE citizens by supporting the development of innovative SMEs and provide financing solutions to help citizens obtain high quality affordable housing. EDB provides financing and innovative banking solutions to SMEs, considered as one of the foundations of the national economy. More details can be found on www.edb.ae.