UAE Federal Government fully-owned financial entity Emirates Development Bank (EDB) has signed an agreement with the Emirates’ first Peer-to-Peer (P2P) platform Beehive, in order to extend funding options for Small and Medium-sized Enterprises (SMEs).
The move follows EDB’s strategic plan to help SMEs, startups, and large corporates in five priority fields including manufacturing, healthcare, infrastructure, food security, and technology over the next five years.
EDB, as an institutional investor, has initially assigned $8 million (AED30 million) funding through the Beehive platform to qualifying businesses. In turn, Beehive would help creditworthy SMEs develop their operations or boost their working capital by facilitating business loans.
The funds granted through this cooperation have the potential to strengthen hundreds of SMEs across the area, bolstering the bank’s new objective to improve financial access to Emirati and UAE resident-owned SMEs as well as enterprises.
The EDB strategy intends to help SMEs to access finance and develop their business, which should boost their contribution to UAE’s non-oil GDP to over 70 percent by 2021, besides improving in-country value, productivity, and employment.
Commenting on the partnership, Mr. Ahmed Mohamed Al Naqbi, CEO of EDB said, “The collaboration with Beehive is part of our mission to bridge the funding gap by offering SMEs greater and easier access to financial sources. Through our combined efforts, we look forward to strengthening the SME ecosystem and supporting the UAE’s goals to build a robust knowledge-based economy.”
“The addition of institutional investors to Beehive will give SMEs more secure financing and better liquidity on the platform, which means that funding can be received faster too,” remarked Mr. Craig Moore, Founder and CEO of Beehive.
The Beehive platform utilizes crowdfunding technology to connect SMEs looking for finance with a crowd of investors who can support their finance requests, whilst earning attractive returns. It has altered its business strategy to incorporate institutional investors in addition to its network of retail investors, to boost liquidity and speed of funding for its enterprises.
Related: UAE’s EDB, CBD ink deal to offer financial support for SMEs