The Emirates Development Bank (EDB) has signed a Memorandum of Understanding (MoU) with Dubai Islamic Bank (DIB) to set up a credit guarantee scheme and disburse $54.4 million in financing for Small and Medium-sized Enterprises (SMEs).
The agreement is part of a strategy to support SMEs in the country, particularly Emirati-owned businesses, as well as start-ups that need funding assistance. EDB will provide a credit guarantee program to DIB’s SME customers. DIB will offer up to $2.7 million in financing to businesses, with half of the facility amount being guaranteed by EDB.
Businesses in sectors such as manufacturing, healthcare, infrastructure, food security, and technology will be given priority. Enterprises that are 51 percent to 100 percent owned by a UAE national, as well as expats with operations in priority areas, are likely to benefit from the scheme.
“Emirates Development Bank is committed to supporting the UAE’s economic diversification strategy. To achieve this, one of the pivotal steps is to bridge the funding gap for SMEs, particularly those operating in priority economic sectors. EDB is pleased to sign the MoU with Dubai Islamic Bank to facilitate easier access to financial sources for the SMEs, strengthening the ecosystem and supporting UAE’s goals to build a robust knowledge-based economy, and contributing to sustainable economic development.”
The MoU is aligned with EDB’s recently-unveiled strategy, offering direct and indirect lending for SMEs, an investment arm for startups and SMEs as well as business advisory services for entrepreneurs, startups and small companies like coaching, consulting, mentoring, market research.