Emirates Development Bank wants startups and businesses serving five key sectors to access loans in the shortest time. Image Credit: Shutterstock

Dubai: Business owners and startup founders able to open an account for their companies within 48 hours? And ‘eligible’ startup ventures able to access up to Dh5 million in loans within 5 days?

So, any business owner with a valid Emirates ID and trade license can open a digital business account in those 24-48 hours. The IBAN number will be created instantly, and there are no requirements of minimum balance and the like. (Opening a business account has often been a trying experience for owners, more so for startups.)

As for the Dh5 million within-the-week loans, these are available to any business that are in or closely associated with five key sectors, deemed as vital to the UAE economy going forward. These are manufacturing, advanced technology, infrastructure, healthcare, as well as agritech and food security.

Ahmed Mohamed Al Naqbi, Emirates Development Bank’s CEO, says this is how the institution wants to make a difference with its one-year old digital bank services. “This digital bank was meant to serve a specific segment - that’s the startup community and small businesses who find it difficult to get some of the services we offer from commercial banks,” he said.

Ahmed Mohamed Al Naqbi - CEO, Emirates Development Bank Image Credit: Supplied

“We saw the gap in the market when we spoke to our partners - there are about 30 of them at the federal and local level in the government and private sector. One challenge all of them had in common was how the startups they were supporting had difficulties opening bank accounts.

“Commercial banks didn’t have much interest because this category is considered high-risk, high-cost and low return. But us being a development bank, we are not looking at returns, not looking at profitability.

“We are looking at solutions that will maximise economic impact. Having startups to have bank accounts is really one of the first steps to be able to become functioning companies.”

Once the business owner downloads the app, he or she will get the IBAN in minutes and the account goes live over the next 24-48 hours. “Speed is essentially what we are trying to give to the startup community,” the CEO said. “A startup cannot wait 3-6 months to open a bank account. On many occasions, they are told by a commercial bank that they cannot open a bank account. By then, the startup would have have wasted 3-6 months of burn rate – that’s heavy.”

5 million in 5 days

Helping with an immediate bank account is one thing, but EDB is venturing deeper into giving the client base a leg up with funding. “Just recently, we launched the up to Dh5 million in 5 days programme with a fintech named Beehive,” said Al Naqbi. “Basically, within 5 days, we give a response to the customer on a Yes or No to their loan request. Very simply put, the startup community wants quick answers.

Image Credit: Supplied

“Even if they get a no, tell them that, but not six months after they are forced to go back and forth on documentation. Because you’ve just wasted six months of the startup, and you can imagine any startup is burning cash on a monthly basis.

“If it’s a no, they know about it on the first day or first week, because they can immediately start working on finding solutions elsewhere.”

“Because if they don’t have those bank accounts, how are they going to be able to pay employees, suppliers or any of the other needs that need a bank visibility.”

So, who can apply? If a business is associated with any of the five key sectors EDB has identified, then they are in the running for the loans. (The account opening is for all businesses, and not limited to the five priority sectors.)

After opening the digital bank account, the business can apply for a loan.

Helping out fintechs?

On lending to fintechs, the EDB DEO said: “We are not looking to finance fintechs or lend to them – that’s not part of our mandate. We believe there is sufficient support for the fintechs already, and every day they are receiving millions of dollars in equity injections (from VCs and private equity).

“We don’t do equity injections, that’s also the reason we are not focussed on fintechs. That doesn’t mean we don’t work with them. When we launched in September 2021, we decided that the way to go about it is work with the best fintechs in the market, those who serve other fintechs, digital startups and small businesses.”