Emirates Development Bank, NBQ to facilitate financing for SMEs

The Emirates Development Bank (EDB) has signed a Memorandum of Understanding (MoU) with the National Bank of Umm Al Qaiwain (NBQ) to facilitate strategic financing options for Small and medium-sized enterprises (SMEs) in the UAE.

The MoU, which will cover Credit Guarantee and Co-lending programmes, will help plug the gap in SME lending support and enhance their contribution to the country’s GDP.

NBQ will offer up to Dhs10 million financing to SMEs, and 50 per cent of the facility amount will be either guaranteed or co-lent by EDB. The programme also aims to support UAE citizens in their startup journey by offering financing facilities of up to Dhs1 million, wherein 60 per cent is guaranteed or co-lent by EDB.

The MoU was signed by Ahmed Mohamed Al Naqbi, Chief Executive Officer of EDB, and Adnan Al Awadhi, Chief Executive Officer at NBQ.

Al Naqbi said, “SMEs are the backbone of our economy. The UAE Government has placed considerable emphasis on developing the SME ecosystem and boosting their contribution to UAE’s non-oil GDP.”

“Our MoU with National Bank of Umm Al Qaiwain will help us facilitate financing through credit guarantee and co-lending options to allow greater operational flexibility to SMEs.”  Al Awadhi, in turn, stated, “The NBQ understands the vital role the SMEs play in building the nation’s economy that is why we have developed financial solutions to allow the SMEs in the UAE to trade safely and confidently and gain access to international markets, thereby positioning the UAE as the global hub of trade and export.”

The Credit Guarantee and Co-lending programme provide a robust platform for EDB and NBQ to increase their financial lending for the SME segment, with a focus on the priority sectors namely manufacturing, healthcare, infrastructure, food security and technology.

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).

Meanwhile last Sunday the Emirates Development Bank (EDB) has announced that it has signed an agreement with Beehive, the UAE’s first Peer-to-Peer (P2P) platform, to expand funding options for the Small and Medium-sized Enterprises (SMEs).

The announcement follows EDB’s strategic pledge to support SMEs, startups and large corporates across five priority sectors including manufacturing, healthcare, infrastructure, food security and technology over the next five years. As an institutional investor, EDB has initially assigned Dhs30 million funding via the Beehive platform to qualifying businesses.