Emirates Development Bank (EDB) and Abu Dhabi Commercial Bank (ADCB) have signed a Memorandum of Understanding (MoU) to boost the financial inclusion of small-to-medium-sized enterprises (SMEs) through a joint credit guarantee scheme.
The partnership will provide SMEs in the UAE with better access to strategic financing options. Under the credit guarantee scheme, EDB will guarantee up to 50% of the finance facility extended to SMEs by ADCB.
The scheme is in line with EDB’s goal to provide AED 30 billion in financing for the development of the economy in 5 strategic sectors, of which AED 5 billion are to be allocated through credit guarantee schemes.
“EDB is dedicated to growing the UAE economy by supporting the sustainable development of our nation’s SME ecosystem. We are pleased to welcome ADCB to our expanding group of commercial bank partners with whom EDB pursues the shared goal of improving access to financing for SME businesses contributing to the UAE’s non-oil GDP,” said Shaker Zainal, Chief mSMEs Officer at Emirates Development Bank. “Through this MoU, EDB will help fill critical lending gaps and provide solutions tailored to financing the growth of the SME sector.”
Saoud Mohammed Al Jassem, Government Clients Division, ADCB, added, “We are committed to providing SMEs with comprehensive banking solutions for their operational and strategic ambitions as they are the backbone of the UAE economy – they represent more than 90% of the total companies operating in the country and generate more than 50% of the UAE’s non-oil GDP. This partnership with EDB will enable us to unlock more funding for the nation’s SME community and expand our support for the government’s ‘We the UAE 2031’ strategy and the ‘National Agenda for Entrepreneurship’.”
In the first 9 months of 2022, EDB approved AED 1.3 billion in loans to SMEs, comprising AED 806 million in direct financing and AED 485 million in indirect financing through EDB’s credit guarantee scheme with partner commercial banks.
