Emirates Development Bank Board of Directors has adopted the UAE small and medium-sized enterprises (SME) finance strategy at it 7th board meeting held last week.
The meeting, chaired by Obaid Humaid Al Tayer, Minister of State for Financial Affairs, decided to support the SMEs, the main driving force in creating jobs and job opportunities. The strategy is in line with the national agenda, which aims to fulfil the UAE Vision 2021. To achieve this objective the board allocated Dh450 million to SME finance in 2018.
“Through the launch of these SME finance products, we seek to support the continuous growth of local economy by helping Emirati entrepreneurs establish their businesses and reach for more successful horizons. These products are in line with the national agenda and the UAE Vision 2021, which aim to increase the contribution of the private sector in economic development,” Al Tayer said in a statement.
The board also approved the establishing of the Emirates Movable Collateral Registry Corporation. This is in line with Federal Law No. 20 of 2016 concerning mortgaging of movable properties as security for debts. The law states that a security registry is to be established to regulate the registration process of movable assets, publicise and prioritise lenders’ rights and cover the processes of terminating or transferring the possession of movable assets as well as their penalties and compensations. This gives companies a greater finance opportunity at a lower cost, which leads to better evaluations with regards to ease of doing business, global competitiveness, innovation, entrepreneurship and development.
The UAE Cabinet recently approved the executive regulations of Federal Law No. 20 of 2016, concerning mortgaging of movable properties as security for debts and issued a directive regarding the establishment of an electronic registry to publicise lenders’ rights. It is expected that the Emirates Movable Collateral Registry Corporation will start operations in the second half of January 2018.
The EDB board also adopted the Mohammad Bin Rashid Innovation Fund Business Strategy. It aims to achieve a quality transition in the field of supporting innovation in the country through bridging the financial gap that creative projects might face. The bank seeks to finance creative entrepreneurs with Dh100 million in 2018, where banks and national banks participating in the Mohammad Bin Rashid Innovation Fund issue bank guarantees to contribute to the finance of creative entrepreneurs.
As part supporting home financing for Emiratis, announced the launch of Home Finance loans for UAE nationals last September. The Home Finance loans cover loans of up to Dh5 Million for UAE nationals to purchase a house, a loan of up to Dh3 Million for UAE nationals to build a house and a complementary loan of up Dh3 Million. Emirates Development Bank Home Finance loan products are characterised by their flexible repayment period that can reach 25 years, competitive rates that lessen the financial burden of UAE nationals. EDB board allocated Dh550 Million to home finance for the year 2018.
In addition, Emirates Development Bank recently issued more than 632 housing approvals, estimated at Dh614 Million, for UAE Nationals. Accordingly, the Home Finance loan portfolio is expected to reach Dh1 billion by the end of 2018.
“At Emirates Development Bank, we believe that success is a journey, not a destination. That’s why we work tirelessly and dedicate all our expertise to providing advice and counselling to entrepreneurs; helping them achieve their potential, affirm their commitment to creating a brighter future for the UAE and support its efforts to transition to a creativity-led economy,” Al Tayer said.