Emirates Islamic joins $27M SME Credit Guarantee Scheme
The first Islamic bank to sign such an agreement.
Emirates Islamic bank has signed an agreement with Emirates Development Bank (EDB) to be part of the AED 100 million Credit Guarantee Scheme.
The AED 100 million ($27 million) Scheme was launched earlier in February this year. In an unprecedented move, Emirates Islamic has become the first Islamic bank to support such a Credit Guarantee Scheme by signing on with EDB.
“The SME sector is a major driver to the growth of the national economy and will boost the UAE’s global competitiveness. As part of our ongoing strategy, we are committed to developing banking solutions that will enable SMEs to effectively contribute to increasing the non-oil GDP and advancing economic diversification.”Faisal Al Bastaki, CEO of EDB
The Credit Guarantee Scheme is set up by Emirates Development Bank (EDB) to contribute to the National Agenda’s goals as part of the UAE Vision 2021. The Scheme will help boost the GDP contributions of SMEs to 70 percent by 2021, in line with the Vision.
Startups are expected to gain up to AED 2 million though the AED 100 million (USD 27 million) scheme via EDB’s partner banks. EDB itself guarantees up to 85 percent of the financial amount.
The Credit Guarantee Scheme also offers AED 5 million to existing SMEs, which is guaranteed up to 70 percent by EDB.
“Emirates Islamic is proud to sign this agreement with EDB, which will greatly boost access to financing and improve the business environment for SMEs. At Emirates Islamic, supporting the SME sector is a top priority, and we will continue to offer them the best in banking solutions, supported by best in class customer service.”Salah Amin, CEO of Emirates Islamic
In a commitment that further reinforces Emirates Islamic’s vision towards supporting SMEs, this Scheme is expected to boost the entire ecosystem; especially considering that the bank represents more than 94 percent of the total number of companies operating in the UAE and employs 86 percent of the private sector workforce.
The region is continually seeing growth as the government, investors, and banks are boosting the ecosystem through the set up of multiple funds, reduction is licensing costs as well as set-up of multiple regional and international accelerators. With the Credit Guarantee Scheme, there are many startups that will get the initial support to set up and grow in the region, while the more established startups and SMEs could get the assistance they need for scaling up their businesses model.
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