UAE’s EDB, Ministry of Economy recognise partner banks

UAE’s Emirates Development Bank (EDB) and the Ministry of Economy have recognised and rewarded all the banking and fintech partners involved in the development lender’s credit guarantee scheme.

EDB is two years into its ambitious five-year strategy aimed at empowering SMEs and large corporates in five priority sectors: manufacturing, technology, healthcare, renewables, and food security. The bank is mandated to deploy Dhs30bn in financing support to 13,500 companies within these sectors by 2026.

“We aim to create a nationwide ecosystem for financing innovation and enhancing bankability and financial inclusion of SMEs. This can only be achieved through partnerships,” said Ahmed Al Naqbi, CEO of Emirates Development Bank.

The bank launched the credit guarantee scheme to support SMEs in the UAE. The scheme aims to help these businesses overcome challenges in accessing financing from conventional banks by providing a partial guarantee to lending banks. This guarantee comes into effect if the SME fails to repay its financing commitments.

The credit guarantee scheme not only provides financial support to SMEs but also helps them establish a positive credit history with banks. This enables sustainable financing for their businesses in the future, ensuring long-term growth and success.

“The partnership has successfully proved its ability to bridge the funding gap for SMEs and strengthen the UAE’s SME ecosystem, supporting the national agenda to build a robust knowledge-based economy,” said Abdullah Al Saleh, under-secretary of the UAE’s Ministry of Economy.

EDB’s commitment to SMEs

Meanwhile, EDB has partnered with 11 commercial banks for its credit guarantee scheme, which offers favourable financing solutions to SMEs.

These include the Commercial Bank of Dubai, National Bank of Umm-Quwain, Emirates NBD, Abu Dhabi Commercial Bank, First Abu Dhabi Bank, Mashreq Bank, RAK Bank, National Bank of Fujairah, Dubai Islamic Bank and Emirates Islamic.

The development bank is committed to supporting the growth of SMEs and promoting innovation in the UAE’s business landscape. It offers its digital services to UAE-based SMEs through the ‘EDB Business Banking’ app, powered by YAP.

The app provides a business bank account and an IBAN within 48 hours, along with a comprehensive range of fast, secure and round-the-clock banking services.

To further enable SMEs, EDB has partnered with Beehive, integrating a new digital lending feature that allows eligible SMEs to apply for loans of up to Dhs5m directly through the “EDB Business Banking” app and receive approval or feedback within five days. Since its launch in September 2021, the EDB Business Banking app has successfully onboarded 2,094 customers.

SMEs can also receive support via a range of non-financial products and services, including The Business Lab, an online platform that provides free essential resources and content to help entrepreneurs at various stages of their business development. Entrepreneurs can receive practical professional tips on how to address common business challenges delivered through short films.

EDB offers a patient debt approach with an emphasis on developmental impact. The bank’s direct and indirect financing is offered with long tenors, higher loan-to-value ratios, lower rates and interest grace periods.

The development bank approved Dhs6.1bn in financing in 2022, up 673 per cent compared to the previous year. EDB approved Dhs1.8bn in financing to SMEs last year, which jumped 87 per cent compared to 2021 and a 45 per cent increase from the previous quarter. The financing comprises Dhs1.2bn in direct financing and Dhs611m indirect financing through EDB’s credit guarantee scheme with partner commercial banks.

Read: Emirates Development Bank’s financing sees 673% YoY rise in 2022; here’s how much it gave as loans