EDB Board approves funds for start-ups and SME credit guarantee scheme
The Board of Directors reviewed EDBs significant achievements for 2018 to date, such as the UAE National Home Finance portfolio reaching AED818 million, up from AED213 million during the first quarter of the year; SME financing reaching AED345 million; and the launch of the Emirates Moveable Collateral Registry Corporation (EMCR), which achieved remarkable success with a record 11,617 registered certificates for movable and mortgaged assets. The Electronic Asset Registry System is already used by 50 of the total number of banks operating in the UAE with more than 344 system users.
The Board approved the plan to launch a Direct Financing Programmeme for start-ups and emerging companies, to support Emiratis and providing them with the necessary credit to start their companies and develop their businesses. A AED50 million fund has been approved for 2018, from which the programme will finance up to AED2 million for start-ups owned by Emiratis (with more than 51 per cent ownership) in accordance with the Banks terms and conditions. The Direct Financing Programme has a competitive interest rate and a flexible repayment option.
The Board of Directors also approved a AED 100 million fund for the Credit Guarantee Scheme to finance SMEs, by financing of up to AED2 million for start-ups where the bank guarantees 85 per cent of the value of the financing, and AED5 million for existing companies where the bank guarantees 70 per cent of the value of the financing.
HE Obaid Humaid Al Tayer, Minister of State for Financial Affairs and Chairman of the Board of Directors of Emirates Development Bank, said that EDB continues to implement its plans and strategies in line with its mission of achieving sustainable financial development for the bank and its partners, meeting the objectives of providing adequate housing for Emiratis, creating more jobs for them, moving towards smart industries and sustaining growth for all parties participating in the development process.
He added that the launch of the EMCR has contributed to increasing the ability of businesses to obtain finance at low interest rates, in addition to providing the institutional framework and appropriate legislation for secured lending, increasing the UAEs competitiveness, and enhancing its business environment by improving the country's rating in the “getting credit” index in the annual Ease of Doing Business Report of the World Bank Group.
“SME financing products have achieved the desired success in terms of the number of companies that have received the funding, as they are the main focus of the country's economy and are considered the engine for creating jobs opportunities and introducing new and innovative business models, which reinforce the development of a sustainable, national economy, strengthen its regional and global competitiveness and accelerate transformation towards a knowledge-based economy in line with the National Agenda. The Bank has financed businesses in the sectors of education, manufacturing, recycling, real estate, transportation and food production to a total value of AED345 million,” he added.
The UAE National Home Finance strategy has achieved significant success in enabling Emiratis to purchase or construct their own homes, improving their standard of living and easing their financial burden, enabling them to attain social stability in order to achieve high levels of satisfaction and happiness. Home Finance products include home purchase facilities up to AED5 million and home construction up to AED3 million, added Al Tayer.