Emirates Development Bank (EDB) and Abu Dhabi Commercial Bank PJSC signed a Memorandum of Understanding (MoU) to boost financial inclusion of small-to-medium sized enterprises (SMEs) through a joint credit guarantee scheme, on Monday.
The partnership will enable SMEs in the UAE to have improved access to strategic financing options. Under the credit guarantee scheme, EDB will guarantee up to 50 per cent of the finance facility extended to SMEs by ADCB. The scheme is in line with EDB’s mandate to provide Dh30 billion in financing towards the development of the UAE economy in five strategic sectors, of which Dh5 billion are to be allocated through credit guarantee schemes.
Shaker Zainal, Chief mSMEs Officer at EDB, said: “We are pleased to welcome ADCB to our expanding group of commercial bank partners with whom EDB pursues the shared goal of improving access to financing for SME businesses contributing the UAE’s non-oil GDP. Through this MoU, EDB will help fill critical lending gaps and provide solutions tailored to financing the growth of the SME sector.”
Saoud Mohammed Al Jassem, Government Clients Division, ADCB, said: “ADCB is committed to providing SMEs with comprehensive banking solutions for their operational and strategic ambitions as they are the backbone of the UAE economy – they represent more than 90 per cent of the total companies operating in the country and generate more than 50 per cent of the UAE’s non-oil GDP. This partnership with EDB will enable us to unlock more funding for the nation’s SME community.”
In the first nine months of 2022, EDB approved Dh1.3 billion in loans to SMEs, comprising Dh806 million in direct financing and Dh485 million in indirect financing through EDB’s credit guarantee scheme with partner commercial banks.
