Mohammed Bin Rashid Fund for SMEs partners with Beehive to support startups

The Mohammed Bin Rashid Fund for Small and Medium Enterprises has assisted over 1,224 SMEs to secure more than Dhs145.8m in financing through Beehive, a peer-to-peer lending platform.

In the last five years, the fund has provided innovative financing solutions and support for SMEs and entrepreneurship.

In 2021, the fund supported SMEs with Dhs65.29m worth of financing, of which Dhs47.67m was disbursed through Beehive to 374 projects.

Since its inception, the fund has facilitated over Dhs188m through its multiple funding schemes either directly or through partnering with various financial institutions, including Beehive. The partnership with Beehive provides Emirati-owned SMEs with easily accessible financing options, including a term loan (business finance) under a capital guarantee scheme, and working capital funding (invoice finance).

Starting from 2017 to the period ending on September 30, the partnership has accepted 6,515 requests from 1,211 SMEs for invoice finance and extended bBusiness finance to 13 projects.

Total financing provided by the partnership during this period was Dhs145.8m, in which invoice finance had a significantly large share of Dhs138.1m.

In 2022, the total financing of Dhs41.4m provided by the partnership to date has been in the form of invoice finance.

Hamda Khalil Ali Hussain, head of Underwriting & Risk Management at Mohammed Bin Rashid Fund for Small and Medium Enterprises, said: “Beehive uses innovative financial technology to connect companies seeking fast and affordable financing with investors who can help fund their growth. It also instills institutions or individuals wishing to invest in startups with confidence via a guarantee from the fund.”

He added, “The guarantee in turn motivates investors to participate in lending and supporting SMEs so that in the event of a particular company defaulting on repayment, the valuation of the company applying for the loan would improve once it is supported by the fund.”

SMEs in Dubai, fully owned and managed by Emiratis, can obtain business financing of up to Dhs1,250,000 backed by a 100 per cent capital guarantee and financed by the fund through its guarantee pool of Dhs20m. While, SMEs in Dubai, in which Emiratis have 50 per cent ownership and management rights, also can obtain financing of up to Dhs625,000, backed by a 50 per cent capital guarantee.

Invoice financing is ideal for UAE-based businesses that have been trading for a minimum of 12 months and have a strong credit history. The service on Beehive directly connects businesses seeking working capital with investors willing to lend against the value of their invoices. Businesses can get up to 80 per cent of the outstanding receivables on invoices that are due within 30 to 150 days.