Dubai SME, the agency of Dubai Economy for developing the small and medium enterprises sector announced new measures as part of its effort to support the industry.
Earlier this year the agency had announced that SMEs in Dubai, completely owned and managed by Emiratis can acquire up to $2.7 million as loan with an assurance of full capital guarantee and financed by Dubai SME’s financial arm.
SMEs, which have 50 percent of Emirati ownership and management rights, can obtain financing of up to $1,14,347 backed by half capital guarantee.
The backing is provided by the Mohammed bin Rashid Fund, from its guarantee pool of $5.4 million, which aims to encourage the investors to be part of supporting the sector that contributes nearly $54 billion to the total gross domestic value of the Dubai economy.
The deputy CEO of Dubai SME, Saeed Al Marri, says that the organization is always committed to giving new financing solutions to SMEs following the directions of the authority to back the business continuity and SMEs in the Emirate.
About 99.2 percent of Dubai’s establishment are SMEs and half of the Emirate’s GDP is their contribution. The total number of SMEs in Dubai is estimated at 151,875. Since the starting of this year about 220 loans have been registered on this program with a value exceeding $51 million, compared to 280 loans in 2019 valued at $43 million.
Now, the Dubai SME is partnering with Beehive, the first P2P (peer-to-peer) financial technology in MENA (Middle East and North Africa) region to bring an innovative platform to let individuals invest in SMEs and derive great returns at the same time allowing the entrepreneurs and small businesses to integrate their profits and move towards sustainable growth.
“The platform uses innovative technology to link companies seeking fast and affordable financing to suitable investors. Starting at a minimum investment of $27.23, the platform has become an incentive for investors to financially support local projects, thereby earning profits and contributing to overall economic growth,” Dubai SME said.
SMEs which need financing through Beehive should undergo an eligibility test for which they have to submit bank statements, personal data of the owner and its audited financial statements. The companies which pass the eligibility test will be informed about the loan amount they can acquire, tenure period and the profit rate applicable.
Further, the investor is given the opportunity to select the loan or company to invest in. From this new program, an annual return of 10 percent of the investment amount is expected for the investor though it can vary based on loan terms of 12, 24 or 36 months.
The returns will be debited to the investors’ bank account every month and can be withdrawn at their will unless it is linked to a loan. If it is a contribution to a specific loan, the investor can reinvest it in a public offering or wait till the loan period expires.