EDB launches $1.36m rapid loan facility for SMEs and start-ups in priority sectors

Emirates Development Bank, the public lender specializing in financing businesses in key industrial sectors, has launched a new lending feature that allows businesses to apply for loans of up to 5 million dirhams ($1.36 million) and to receive a return of approval within five days.

Startups and small and medium-sized businesses can apply for quick loans directly through the bank’s digital banking app, an EDB statement said Monday.

The service, launched in partnership with peer-to-peer lending platform Beehive, aims to improve access to finance for SMEs and further simplify doing business in the country.

“EDB fills a critical gap in the market by providing financing solutions to all businesses with proven potential to contribute to the sustainable development of the UAE,” said Ahmed Al Naqbi, Managing Director of EDB.

“It is clear that quick access to finance is one of the biggest challenges facing SMEs and start-ups.”

SMEs are the backbone of the UAE economy, accounting for 98% of businesses operating in the country. Developing the sector and accelerating the growth of the start-up ecosystem are among the government’s top priorities as it formulates a development strategy for the next 50 years.

EDB, which is at the heart of the government’s efforts to improve access to finance for start-ups and small businesses, has already launched several initiatives as part of its efforts to reach 30 billion dirhams in total financing before the end of 2025.

The lender aims to increase its funding to Dh5bn by the end of this year, from around Dh2bn it had lent until June. It plans to exceed the funding level of 5 billion dirhams next year and in 2024, said Mr Al Naqbi The National in June.

The EDB said the new loan service would be available to UAE-based SMEs and start-ups operating in one of five priority sectors – manufacturing, healthcare, food security, high tech and infrastructure – during 60 months maximum.

It plans to allocate 7 billion dirhams of financing to the manufacturing sector over the next five years. The high-tech sector is expected to receive Dh5 billion in funding, infrastructure Dh8 billion, healthcare Dh2.5 billion and businesses in the agricultural technology and food security sector are expected to receive Dh2.5 billion. billion additional Dhs.

“We are constantly looking to collaborate with FinTech companies and financial partners to facilitate the financing process for SMEs and enable quick and easy access to the bank’s financial services,” said Mr. Al Naqbi.

Abu Dhabi-based EDB, which also finances large corporate clients, provided financing of around 350 million dirhams through its credit guarantee program, which was rolled out in partnership with nine commercial banks.

The 10th financial institution will soon be added to the list to help SMEs access finance and comprehensive banking services, Al Naqbi said in June.

In addition to its direct and indirect financing, EDB’s digital platform allows SMEs and start-ups to open an account and reserve an Iban number in a few hours to access banking services.

EDB, founded in 2011 by the merger of Emirates Industrial Bank and Real Estate Bank, aims to generate 25,000 jobs over the next five years.

The lender’s revamped strategy helped adding 1.91 billion dirhams to the national economy and supported the growth of more than 1,350 SMEs until the end of the first quarter of this year, Al Naqbi said in June.

Updated: August 30, 2022, 1:07 p.m.