Dubai, United Arab Emirates, 19 April, 2023: Emirates Development Bank (EDB), a key financial engine for the economic development and industrial advancement of the nation, and Emirates Islamic, one of the leading Islamic financial institutions in the UAE have announced the signing of a Memorandum of Understanding (MoU) to collaborate on a joint credit guarantee scheme supporting the financial inclusion of small-to-medium sized enterprises (SMEs) in the UAE.
Emirates Islamic is the 11th commercial bank to join EDB’s credit guarantee scheme platform offering favourable financing solutions to SMEs. Under the partnership agreement, EDB will guarantee 50% of the finance facility extended to eligible SMEs by Emirates Islamic. Both banks will also collaborate to identify further opportunities to enhance their banking solutions.
Ahmed Mohamed Al Naqbi, Chief Executive Officer at Emirates Development Bank said: “EDB remains committed to enhancing our nation’s SME ecosystem and supporting the sustainable economic development of the nation, specifically the five key priority sectors. We are pleased to welcome Emirates Islamic to our expanding group of commercial bank partners with the shared goal of facilitating access to financing for SMEs contributing to the UAE’s non-oil GDP.
Salah Mohammed Amin, Chief Executive Officer at Emirates Islamic said: “As a home-grown Islamic financial institution, supporting the UAE’s SME sector is a top priority for Emirates Islamic and we are proud to be partnering with EDB. This reflects our shared commitment to supporting the growth of the segment in the UAE, as we strive to enhance the overall SME business ecosystem and make financing more accessible.”
He added “SMEs are a key driver of Emirates Islamic’s growth strategy and we offer a wide range of business banking products and services tailored to meet the needs of companies in this critical sector.”
As the UAE’s development bank, EDB’s mandate includes the provision of AED 30 billion in financing towards the development of the UAE economy in five strategic sectors by 2026, of which AED 5 million are to be allocated through credit guarantee schemes.
In FY 2022 EDB approved AED 6.1 billion in financing, representing a 673% increase over the previous year. A total of AED 1.8 billion in financing was approved to SMEs for FY 2022, representing a 387% increase over FY 2021 and a 45% increase over previous quarter. This comprised AED 1.2 billion of direct financing and AED 611 million of indirect financing through EDB’s credit guarantee scheme with partner commercial banks.
