UAE Federal Government fully-owned financial entity Emirates Development Bank (EDB) and the region’s leading financial institution Mashreq Bank have signed a Memorandum of Understanding (MoU) to offer Credit Guarantee programs for SMEs in the country.
Under the deal, EBD will offer credit guarantees and co-lending programs to Mashreq Bank’s SME customers, to help with expenses towards activities such as the purchase of equipment and fixtures, construction of work premises, business expansion, purchase of inventory, supplies, and raw materials as well as general financing needs for payments such as salaries or rent.
Mashreq will provide SME customers a mix of Capex and working capital credit of up to $2 million (AED 10 million) under the scheme, with EDB guaranteeing or co-lending 50 percent of the facility amount.
Furthermore, the credit guarantee program intends to assist UAE individuals in their startup journey by providing funding of up to $272,258 (AED 1 million), with EDB guaranteeing or co-lending 60 percent of the amount.
Ahmed Mohamed Al Naqbi CEO – EDB
“SMEs are the backbone of UAE’s economy and the government has placed considerable emphasis on developing the SME ecosystem and boosting their contribution to UAE’s non-oil GDP. Our partnership with Mashreq Bank will help facilitate financing through credit guarantee and co-lending options to SMEs and allow greater operational flexibility to the entities. This is part of recently announced EDB’s strategy to enable UAE’s economic diversification and provide financing support to SMEs operating in key sectors.”
Mr. Ahmed Abdelaal, Group CEO at Mashreq said, “SMEs represent more than 94 percent of companies in the UAE, employing about 86 percent of the country’s private sector workforce, and generating 52 percent of the non-oil GDP. Mashreq is delighted to partner with Emirates Development Bank on this initiative, thus ensuring that the UAE’s key value chain drivers; its job-creating SMEs – are provided with better access to financing to meet their operational needs.”
The MoU is part of EDB’s strategy to boost SMEs’ contribution to the country’s GDP. Further, it is in line with EDB’s recently revealed strategy, which includes direct and indirect lending (Supply Chain, Project and Long-Term Finance), an investment arm for startups and SMEs (accelerator, equity finance, business growth fund), and business advisory services for entrepreneurs, startups, and small businesses (coaching, consulting, mentoring, market research).
Thank you very much for choosing GCC Business News to be an important part of your professional life. You will receive a confirmation e-mail. Please check SPAM or UPDATES folder
