Ajman Bank and Emirates Development Bank (EDB) signed a preliminary agreement to offer a credit guarantee and co-lending package for small and medium-sized enterprises in the UAE with a focus on the industrial sector, as the country aims to further support entrepreneurs to set up and expand businesses.
As part of the pact, EDB will provide a credit guarantee and/or offer a co-lending program to Ajman Bank’s SME customers, the lenders said in a joint statement on Sunday.
Ajman Bank will offer up to Dh10 million ($2.72m) in financing to SMEs, with 50 percent of the facility amount to be either guaranteed or co-lent by EDB. The collaboration will also support UAE citizens in starting a business by offering financing facilities of up to Dh1m, whereby 60 percent is guaranteed or co-lent by EDB.
“Our collaboration with the Emirates Development Bank will bring together our collective resources and come at a decisive moment for economic recovery after the pandemic, which is ultimately aimed at helping the business community,” said Mohamed Amiri, chief executive of Ajman Bank.
“Moving forward, we will continue to expand on the range of solutions to accelerate growth.”
EDB’s credit guarantee and the co-lending program is part of a plan for Ajman Bank to increase their lending to SMEs, with a focus on the priority industrial sectors – manufacturing, healthcare, infrastructure, food security, and technology, according to the statement.
The UAE aims to attract foreign investment, support the growth of SMEs and increase the contribution of the industrial sector to the national gross domestic product in order to strengthen its economy.
EDB was founded in 2011 through a merger between the Emirates Industrial Bank and Real Estate bank. It aims to provide Dh30 billion in financing over the next five years to support the UAE’s efforts to more than double the size of its industrial sector by 2031.
It will fund industries such as healthcare, infrastructure, food security and technology, and help to generate 25,000 jobs.
“The increased financial accessibility to the SMEs – the backbone of the country’s economy – will not only help them develop and grow their businesses but also boost their contribution to UAE’s non-oil GDP,” said Ahmed Al Naqbi, chief executive of EDB.
“Together, we aim to support companies and entrepreneurs to have access to wider financing options, which will serve the country’s efforts of building a knowledge-based economy and contribute to sustainable economic development.”
Last month, EDB signed a preliminary agreement with the National Bank of Fujairah to offer a credit guarantee and co-lending package for SMEs in priority sectors in the UAE.
(Except for the headline, this story has not been edited by The Technology Express staff and is published from a syndicated feed)
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