By Sam Bridge / Arabian Business
Emirates Development Bank has announced the launch of the new Credit Guarantee Scheme
Emirates Development Bank (EDB) has announced the launch of the new Credit Guarantee Scheme, amounting to AED100 million ($27 million) in support of small and medium sized enterprises (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, a statement said.
The Credit Guarantee Scheme is part of EDB’s commitment to boost SMEs’ GDP contribution to reach 70 percent by 2021.
The scheme 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 AED2 million financing to startups where EDB guarantees their loan up to 85 percent, and up to AED5 million financing to existing SMEs where EDB also guarantees up to 70 percent of their loan, the statement added.
Obaid Humaid El Tayer, Minister of State for Financial Affairs and chairman of Emirates Development Bank, said the scheme provides a solid platform for emerging national companies and entrepreneurs to explore new opportunities through innovation such as smart industries.
He added that the UAE will continue developing banking solutions that will enable SMEs to effectively contribute to increasing non-oil GDP.
“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," he said.
Abdul Aziz Al Ghurair, chairman of the UAE Banks Federation, added: “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.”
EDB said it has signed agreements with several banks in the UAE, including Commercial Bank of Dubai, RAKBANK, Mashreq Bank, Al Masraf, National Bank of Fujairah, and Commercial Bank International, with plans to further expand their partnership portfolio.