Emirates Development Bank teams up with National Bank of Fujairah to fund UAE SMEs

NBF will offer up to $2.7m in funds to small businesses while EDB will guarantee half of the amount

EDB chief executive Ahmed Al Naqbi and NBF chief executive Vince Cook after signing a preliminary agreement to offer credit guarantee and co-lending for SMEs in the UAE. Photo: EDB

Emirates Development Bank signed a preliminary agreement with National Bank of Fujairah to offer a credit guarantee and co-lending package for small and medium enterprises in priority sectors in the UAE.

As part of the deal, NBF will offer up to Dh10 million ($2.7m) to SMEs, with half of it being either guaranteed or co-lent by EDB, the two lenders said on Wednesday.

The programme will also offer up to Dh1m of financing to UAE citizens who want to establish a start-up, with 60 per cent of the amount guaranteed or co-lent by EDB.

The agreement is aimed at boosting lending to SMEs in priority sectors such as manufacturing, health care, infrastructure, food security and technology, EDB said.

The agreement forms part “of our endeavour to play a pivotal role in the country’s economic diversification plans and bridge the funding gap for SMEs operating in key sectors across the country”, said EDB chief executive Ahmed Al Naqbi.

“We look forward to facilitate easier access to financial sources, strengthen the SME ecosystem and support the UAE’s goals to build a robust knowledge-based economy, and thus contribute to a sustainable economic development in the country.”

EDB was founded in 2011 through a merger between the Emirates Industrial Bank and 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 help to generate 25,000 jobs.

“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,” NBF chief executive Vince Cook said.

“The partnership with Emirates Development Bank reflects our long-term commitment to the UAE’s vibrant SME ecosystem.”

The agreement is aligned with EDB’s recently unveiled strategy that aims to offer direct and indirect lending to SMEs, an investment arm for start-ups and SMEs, as well as business advisory services for entrepreneurs, start-ups and small companies, the lenders said.

EDB has signed similar agreements with other lenders in the UAE, including Emirates NBD, RAKBank, Commercial Bank of Dubai and the National Bank of Umm Al Quwain earlier this year.

The UAE economy is now forecast to grow 2.1 per cent this year, driven by coronavirus-mitigation measures, according to the UAE Central Bank's second-quarter review.

The Arab world’s second-largest economy is expected to grow 4.2 per cent in 2022, exceeding the previous forecast of 3.8 per cent growth.