EDB reaffirms financial commitment to UAE SMEs and start-ups

The lender earlier this year announced the start of $27m Sanad initiative to accelerate the growth of Emirati-owned and managed SMEs

Abu Dhabi based Emirates Development Bank contributed Dh1.91 billion to the UAE’s gross domestic product over the past 12 months. Photo: Shutterstock

Emirates Development Bank has reaffirmed its commitment to financially support the UAE's small and medium businesses and start-ups.

The lender will empower the country's SMEs and start-ups with a range of financial solutions and services that boost the "bankability" of the sector, it said on Sunday.

"It is critical that businesses, entrepreneurs and SMEs have access to the financing they need to scale, expand and succeed,” Mr Al Naqbi said, adding that there is a clear correlation between financial inclusion and development.

He was speaking during events to mark Arab Day for Financial Inclusion, which is celebrated on April 27 of each year.

Abu Dhabi-based EDB has been providing direct or indirect financing, including a credit guarantee programme in partnership with nine commercial banks and other digital solutions, to help SMEs access access finance and full banking services.

The digital platform offered by the bank allows SMEs and start-ups to open an account and reserve an IBAN number in a matter of hours to access banking services.

In the first six months of the launch of the new service, more than 1,000 digital banking accounts have been created to support entrepreneurs in the UAE, the bank said.

Earlier this year, EDB announced the Dh100 million ($27m) Sanad initiative to accelerate the growth of Emirati-owned and managed SMEs, after the Covid-19 pandemic.

Financing requests through Sanad are processed within five working days. The credit assessments are based primarily on an SME's 2019, pre-Covid financials, with relaxed norms on the evaluation of their 2020-2021 financial performance.

“Under the EDB’s mission to enable the UAE’s economic and industrial agenda, and in line with our commitment to create a supportive environment for business, we offer a patient debt approach with flexible pricing and tailored financing solutions for SMEs that widen financial inclusion in the UAE,” Mr Al Naqbi said.

SMEs are the backbone of the UAE economy, comprising 98 per cent of the total companies operating in the country.

EDB was founded in 2011 after a merger between Emirates Industrial Bank and the Real Estate Bank. It aims to provide Dh30 billion in financing over the next five years to support the UAE’s efforts to more than double the size of its industrial sector by 2031. It will fund industries such as health care, infrastructure, food security and technology, and aims to generate 25,000 jobs.

EDB has recently signed agreements with a number of lenders including RAKBank, Commercial Bank of Dubai and others to offer credit guarantees and participate in co-lending programmes to SMEs in priority sectors in the UAE.

“The goals of financial inclusion are also served by our unique evaluation of a company’s eligibility for financing based on its economic development impact,” Mr Al Naqbi said.

“EDB has developed a proprietary ‘Developmental Impact Scorecard’ that measures the likes of [gross domestic product] growth, job creation potential, in-country value, economic sector and existing access to finance, on top of the standard risk and profit calculations, enabling the bank to support projects that offer developmental benefits with flexible financing solutions that may not be available through more traditional banking channels,” Mr Al Naqbi said.

The lender contributed Dh1.91bn to the UAE’s GDP over the past 12 months, as it continued to play a key role in supporting the Gulf country’s industrial strategy.

EDB also provided direct and indirect financing to 1,350 SMEs across priority sectors and introduced a credit-guarantee platform, which has mobilised more than Dh332m of capital to SMEs, it said last month.