EDB partners with Mashreq Bank on Credit Guarantee Programs for SMEs in UAE

Dubai: Emirates Development Bank (EDB), a key financial enabler of the country’s economic diversification, has signed a MoU with Mashreq Bank, one of the leading financial institutions in the UAE, to provide Credit Guarantee programs for SMEs in the country.

Under the agreement, EBD will provide credit guarantees and co-lending programs to Mashreq Bank’s SME customers, construction of work premises, business expansion, purchase of inventory, supplies and raw materials as well as general financing needs for payments such as salaries or rent.

Within the scheme, Mashreq will offer a mix of Capex as well as working capital facilities of up to Dh10 million to SME customers, of which 50 per cent of the facility amount will be guaranteed or co-lent by EDB. Additionally, the credit guarantee program also aims to support UAE citizens in their startup journey by offering financing of up to Dh1 million, wherein 60 per cent is guaranteed or co-lent by EDB.

“SMEs are the backbone of UAE’s economy and the government has placed considerable emphasis on developing the SME ecosystem and boosting their contribution to UAE’s non-oil GDP,” said Ahmed Mohamed Al Naqbi, CEO of EDB. “Our partnership with Mashreq Bank will help facilitate financing through credit guarantee and co-lending options to SMEs and allow greater operational flexibility to the entities.”

The MoU is part of EDB’s focus to enhance the contribution of SMEs to the country’s GDP. The partnership will focus on providing strategic financing solutions to SMEs – one of the economic pillars of the UAE.

The MoU is aligned with EDB’s recently-unveiled strategy, offering direct and indirect lending for SMEs (Supply Chain, Project and Long-term Finance), an investment arm for startups and SMEs (accelerator, equity finance, business growth fund) as well as business advisory services for entrepreneurs, startups and small companies (coaching, consulting, mentoring, market research).