Emirates Development Bank (EDB) has signed an MoU with Mashreq Bank to provide credit guarantee programmes for SMEs in the country. EBD will provide credit guarantees and co-lending programmes to Mashreq Bank’s SME customers, to support with expenses towards activities including the purchase of equipment and fixtures, construction of work premises, business expansion, purchase of inventory, supplies and raw materials as well as general financing needs for payments such as salaries or rent. Mashreq will offer a mix of capex as well as working capital facilities of up to Dhs10m to SME customers, of which 50 per cent of the facility amount will be guaranteed or co-lent by EDB. Additionally, the credit guarantee programme also aims to support Emiratis by offering financing of up to Dhs1m, wherein 60 per cent is guaranteed or co-lent by EDB.
SMEs represent more than 94 per cent of companies in the UAE, employing about 86 per cent of the country’s private sector workforce, and generating 52 per cent of the non-oil GDP. Mashreq is delighted to partner with Emirates Development Bank on this initiative, thus ensuring that the UAE’s key value chain drivers; its job-creating SMEs – are provided with better access to financing to meet their operational needs. EDB has recently signed similar agreements with several other financial institutions and platforms in the country to support SMEs, including Commercial Bank of Dubai, NBQ and Beehive.