The Dubai government has launched a new Dhs600 million fund to support Emirati start-ups and SMEs in the emirate, official news agency WAM reported on Sunday.
The Mohammed bin Rashid Fund for SMEs, launched by Dubai SME, will offer Emirati nationals aged between 21 and 65 years two types of loans.
The seed capital loan will be given directly to startups requiring funding of between Dhs50,000 and Dhs500,000, while the credit scheme loan, offered through banking partners and guaranteed by the fund, will be offered to startups and existing businesses requiring a funding of between Dhs500,000 and Dhs5 million.
The fund allows for a maximum of two-years during which no accumulating interests will be relayed to the seed loan, the report said.
The period granted to settle the loan should not exceed seven years, including the two-year grace period.
The fund’s operating model involves re-investing the loan settlement to finance new projects.
Sami Al Qamzi, director-general, Department of Economic Development, Dubai, said: “The fund follows clear procedures within the Dubai SME services, allowing entrepreneurs to benefit from integrated funding solutions.
“The Dubai SME contributes to the development of the proposed business idea, obtains necessary approvals from other government departments, offers training workshops to help integrate new business owners in the local market and supports them to prepare their finance application form.
“Once this is presented to the fund, a feasibility study is made and financial advice and financing options are given,” he explained.
The main conditions are that the project should be based in Dubai and that it should be completely owned by an Emirati.
“The applicant should also be personally committed to developing and executing the business plan and managing the project as a whole,” said Saeed Matar Al Marri, deputy CEO and director of the fund.
The fund will focus on “innovative project ideas that will contribute to the strategic goals of Dubai and the UAE” and projects that adopt digital and smart technologies and are keen on “robotising their operations,” added Abdul Baset Al Janahi, CEO of Dubai SME and vice chairman of the fund’s Supervising Committee.
“Through the fund, we aim specifically to nurture the sense of innovation and creativity of Emirati entrepreneurs. In addition to its financing role, the fund will act as an incubator to innovative projects through the Hamdan Innovation Incubator,” he explained.
The fund will monitor the funded projects through reviewing their business reports and field visits and will also advice entrepreneurs if required, the report added.
The UAE has been investing heavily in building up an ecosystem for start-ups and entrepreneurs in the country.
The Khalifa Fund for Enterprise Development, launched in 2007, offers Emirati entrepreneurs and SMEs training and funding programmes.
The Hamdan Innovator and Incubator, established by the Mohammad Bin Rashid establishment, includes an Idea Lab, an Incubator and Seed Fund and aims to make Dubai “the entrepreneurial capital of the region.”