UAE's Dh50bn Tess economic stimulus benefits more than 270,000 customers

The ministry of finance says 260,000 individuals and 9,527 SMEs availed interest-free loans provided by the CBUAE under the scheme

The Central Bank of the UAE praised the UAE leadership for its efforts in aiding the country's economic recovery. Ryan Carter / The National

More than 270,000 customers – including individuals and small and medium sized enterprises (SMEs) – benefited from the UAE’s Targeted Economic Support Scheme (Tess), the ministry of finance said on Wednesday.

The interest free-loans provided under the Dh50 billion economic package by the Central Bank of the UAE were availed by 260,000 individuals and 9,527 SMEs to help them navigate through the pandemic-induced slowdown.

The central bank first rolled out Tess in March as it unveiled a Dh100bn stimulus package to support companies and individuals affected by closure of all but essential businesses to stem the Covid-19 outbreak. This included the Dh50bn of zero-cost collateralised loans now being drawn down and a loosening of banks' capital buffers, giving them more firepower to lend. Further easing of capital and liquidity buffers has since increased the size of this stimulus to Dh256bn.

The ministry said SMEs benefited from a total of Dh4.1bn of loans by July, accounting for 9.3 per cent of total amount disbursed. Meanwhile, 260,616 individuals received support worth Dh3.2bn from the authorities to ease the impact of the pandemic.

Private sector companies benefited from a total of Dh33.7bn, the ministry added.

Th UAE also repaid about Dh8.3bn of bank guarantees to employers. The ministry's move comes after the cabinet cancelled bank guarantees (required to secure a visa for employees) and replaced them with the employment insurance system. It has "contributed greatly to supporting business continuity and ensuring salaries for workers in the private sector", Saif Ahmed Al Suwaidi, undersecretary for human resources affairs at the ministry of human resources and emiratisation, said.

Globally, the pandemic has disrupted daily life, halted air travel, roiled stock markets and forced governments and central banks to introduce monetary and fiscal stimulus packages worth more than $11 trillion (Dh40.4tn) over the last few months.

The UAE was the first in the Middle East and North Africa region to roll out Dh282bn in fiscal and monetary support, in addition to a variety of other initiatives that ranged from discounted utility bills to waivers of government fees.

Earlier this month, the UAE central bank's chairman pledged to continue focusing on financial and fiscal stability during the current crisis, supporting economic growth, countering inflation and boosting the country’s foreign currency reserves.

The “critical juncture” the world is at amid the global pandemic, requires further development of the financial infrastructure and digital solutions, which the UAE regulator is overseeing, Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, said according to Wam.