Emirates Development Bank (EDB), the fully-owned UAE Federal Government financial entity, has signed a Memorandum of Understanding (MoU) with the National Bank of Fujairah (NBF), a full-service corporate bank, to offer a credit guarantee and co-lending package for small and medium-sized enterprises (SME) in priority sectors in the country.
As part of the MoU, NBF will offer up to $2.7 million to SMEs, with half of it being either guaranteed or co-lent by EDB, the two lenders said. The program will also offer up to $270,000 of financing to UAE citizens who want to establish a startup, with 60 percent of the amount guaranteed or co-lent by EDB.
The partnership with NBF is in line with EDB’s commitment to enhance the SME ecosystem in the UAE and increase its contribution to the country’s gross domestic product (GDP). The MoU focuses on offering strategic financing solutions to SMEs, one of the economic pillars of the UAE.
Ahmed Mohamed Al Naqbi CEO – EDB
“As part of 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 across the country, we are pleased to sign the MoU with the NBF. Through our combined and concerted efforts, we look forward to facilitating easier access to financial sources, strengthening the SME ecosystem and supporting the UAE’s goals to build a robust knowledge-based economy, and thus contribute to sustainable economic development in the country.”
The agreement is aimed at boosting lending to SMEs in priority sectors such as manufacturing, healthcare, infrastructure, food security and technology, EDB said.
In his comments, Mr. Vince Cook, NBF’s CEO, said, “SMEs are the backbone of the local economy in the UAE, and since its inception, NBF has positioned itself as the financial partner for these businesses. The partnership with EDB reflects our long-term commitment to the UAE’s vibrant SME ecosystem and we are delighted to be working together to extend the financing available to our customers and to support the government’s growth aspirations for this sector.”
The agreement is aligned with EDB’s recently unveiled strategy that aims to offer direct and indirect lending to SMEs, an investment arm for startups and SMEs, as well as business advisory services for entrepreneurs, startups and small companies.
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