Deal signed on credit guarantee, co-lending programme for SMEs

ABU DHABI / WAM

The Emirates Development Bank (EDB), fully owned by the UAE Federal Government, has signed a Memorandum of Understanding (MoU) with the Commercial Bank of Dubai (CBD), to offer a credit guarantee and co-lending programmes for small and medium-sized enterprises (SMEs) in the UAE.
The MoU is part of EDB’s commitment to supporting the goals of the national agenda under the UAE Vision 2021, focused on boosting the SME ecosystem in the UAE as well as enhancing the contribution of SMEs to the country’s gross domestic product (GDP). The partnership will focus on providing strategic financing solutions to SMEs – one of the economic pillars of the UAE.
Ahmed Mohamed Al Naqbi, Chief Executive Officer of EDB, signed the MoU with Dr Bernd van Linder, Chief Executive
Officer at CBD.
As part of the MoU, EDB will provide the Credit Guarantee or Co-lending programme to CBD SME customers. Within the MoU scope, CBD can offer up to AED10 million financing to an SME, and 50 percent of the facility amount will be either guaranteed or co-lent by EDB. For its part, CBD will provide SMEs with an innovative and convenient Digital Business account, which can be opened digitally and in real-time. Moreover, CBD will also offer a wide range of loans including Trade and Working Capital finance, loans against POS as well as asset-backed lending solutions.
The programme also aims to support UAE citizens in the startup journey by offering financing facilities of up to AED1 million, wherein 60 percent is guaranteed or co-lent by EDB.
Speaking of the MoU, Ahmed Mohamed Al Naqbi, said, “As part of the EDB’s endeavour to play a pivotal role in the country’s economic diversification plans, and bridging the funding gap for SMEs operating in key sectors, we are pleased to sign the MoU with Commercial Bank of Dubai. Through our combined efforts, we look forward to extending easier access to financial sources, strengthening the SME ecosystem and supporting the UAE’s goals to build a robust knowledge-based economy.”
In his comments, Dr. Bernd van Linder, said, “Our agreement with the Emirates Development Bank is a perfect example of public and private sectors partnering to support SMEs – a vital contributor to the economy of the UAE.
“CBD has always been keen to promote the overall business environment in the UAE and support SMEs and start-ups by providing them with innovative financial solutions to manage their finances and get the best banking solutions through a seamless and smooth user experience.”
The Credit Guarantee and Co-lending programme provides a robust platform for EDB and CBD to increase their financial lending for the SME segment, with a focus on the priority sectors.
The MoU is aligned with the recently-unveiled EDB’s 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).