UAE’s EDB, CBD ink deal to offer financial support for SMEs

By Amirtha P S, Desk Reporter
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The Emirates Development Bank (EDB), fully owned by the UAE Federal Government has signed a Memorandum of Understanding (MoU) with Commercial Bank of Dubai (CBD), one of the leading banks in the country, to offer Credit Guarantee and Co-lending programs for small and medium enterprise (SME) in the emirate.

The MoU is in line with EDB’s commitment to supporting the goals of the National Agenda under the UAE Vision 2021, focused on boosting the SME ecosystem in the country as well as enhancing their contribution to the country’s GDP. 

The partnership deal, signed by Ahmed Mohamed Al Naqbi, Chief Executive Officer of EDB and Dr. Bernd van Linder, Chief Executive Officer of CBD, will further focus on providing strategic financing solutions to SMEs.

As part of the MoU, EDB will provide the Credit Guarantee or Co-lending program to CBD’s SME customers. Within the scope of the deal CBD can offer up to $2.72 million financings to a SME, and 50 percent of the facility amount will be either guaranteed or co-lent by EDB. 

For CBD’s part, it will provide SMEs with an innovative and convenient Digital Business account, which can be opened digitally and in real-time. Moreover, CBD will also offer a wide range of loans including Trade and Working Capital finance, loans against POS as well as asset-backed lending solutions.

 Ahmed Mohamed Al Naqbi
Ahmed Mohamed Al Naqbi

“As part of the EDB’s endeavor to play a pivotal role in the country’s economic diversification plans, and bridging the funding gap for SMEs operating in key sectors, we are pleased to sign the MoU with Commercial Bank of Dubai. Through our combined efforts, we look forward to extending easier access to financial sources, strengthening the SME ecosystem and supporting the UAE’s goals to build a robust knowledge-based economy.”

The program also aims to support UAE citizens in the startup journey by offering financing facilities of up to $ 0.27 million, wherein 60 percent is guaranteed or co-lent by EDB. The Credit Guarantee and Co-lending program provides a robust platform for EDB and CBD to increase their financial lending for the SME segment, with a focus on the priority sectors.

In his comments, Dr. Bernd van Linder, said, “CBD has always been keen to promote the overall business environment in the UAE and support SMEs and startups by providing them with innovative financial solutions to manage their finances and get the best banking solutions through a seamless and smooth user experience.”

Related: Commercial Bank of Dubai brings out robo-advisory investment app ‘CBD Investr’