Emirates Development Bank, ADCB to partner on credit guarantee scheme for SMEs

Emirates Development Bank (EDB) and Abu Dhabi Commercial Bank (ADCB) announced the signing of a Memorandum of Understanding (MoU) to boost financial inclusion of SMEs through a joint credit guarantee scheme.

The partnership will enable SMEs in the UAE to have improved access to strategic financing options. Under the credit guarantee scheme, EDB will guarantee up to 50 per cent of the finance facility extended to SMEs by ADCB. The scheme is in line with EDB’s mandate to provide Dhs30bn in financing towards the development of the UAE economy in five strategic sectors, of which Dhs5bn are to be allocated through credit guarantee schemes.

Shaker Zainal – chief SMEs officer at Emirates Development Bank, said, “We are pleased to welcome ADCB to our expanding group of commercial bank partners with whom EDB pursues the shared goal of improving access to financing for SME businesses contributing the UAE’s non-oil GDP. Through this MoU, EDB will help fill critical lending gaps and provide solutions tailored to financing the growth of the SME sector.”

Emirates Development Bank is pleased to announce the signing of an MoU with Abu Dhabi Commercial Bank, @OfficialADCB, to help boost the financial inclusion of SMEs through a joint credit guarantee scheme. With this partnership, pic.twitter.com/Oavp52KOT0

— Emirates Development Bank (@EDB_UAE) December 12, 2022

Saoud Mohammed Al Jassem, Government Clients Division, ADCB, said, “ADCB is committed to providing SMEs with comprehensive banking solutions for their operational and strategic ambitions as they are the backbone of the UAE economy, they represent more than 90 per cent of the total companies operating in the country and generate more than 50 per cent of the UAE’s non-oil GDP. This partnership with EDB will enable us to unlock more funding for the nation’s SME community and expand our support for the government’s ‘We the UAE 2031’ strategy and the ‘National Agenda for Entrepreneurship’.”

In the first nine months of 2022, EDB approved Dhs1.3bn in loans to SMEs, comprising Dhs806m in direct financing and Dhs485m in indirect financing through EDB’s credit guarantee scheme with partner commercial banks. EDB also recently announced a new digital lending feature offered in partnership with peer-to-peer (P2P) lending platform Beehive that allows SMEs to apply for loans of up to Dhs5m and receive approval or feedback within five days.

The lending service is available for UAE-based SMEs operating in EDB’s five priority sectors – manufacturing, healthcare, food security, advanced technology, and infrastructure. Beyond financing, EDB offers SMEs a digital banking solution in the form of its “Business Banking” app which allows businesses to register and receive an IBAN within 48 hours.