UAE’s Emirates Development Bank (EDB) and Abu Dhabi Islamic Bank (ADIB) have forged a partnership to boost small and medium enterprises (SMEs) in the UAE through a collaborative finance guarantee program.
Enhancing financial inclusion
According to a statement, this alliance is designed to improve financial inclusion for SMEs, granting them essential access to funding. EDB will provide guarantees of up to 50 percent for the financing offered to SMEs by ADIB, targeting projects within EDB’s five key sectors: Manufacturing, Food Security, Advanced Technology, Healthcare, and Renewables.
Expanding impact
Ahmed Mohamed Al Naqbi, CEO of EDB, indicated that the partnership with ADIB represents a crucial step in their ongoing efforts to promote SME development and financial inclusion. He mentioned that through their finance guarantee initiative, in collaboration with twelve leading commercial banks in the UAE, they are assisting businesses in overcoming financial hurdles and achieving their full potential. He also noted that this new partnership expands the scheme’s scope and impact, illustrating how banks can encourage sustainable and inclusive economic growth through strategic alliances and a commitment to making a difference.
Customized support for SMEs
Mohamed Abdelbary, acting group CEO of ADIB, emphasized that the collaboration with EDB reflects their commitment to empowering SMEs, which are considered the backbone of the UAE’s economy. He added that this partnership not only enhances their ability to provide Sharia-compliant financial solutions but also strengthens their position as a reliable partner for growth-oriented businesses.
Abdelbary further explained that through this initiative, they are broadening their support for SMEs by offering customized financing options and comprehensive banking services tailored to meet their specific needs, enabling them to scale, innovate, and contribute to the UAE’s long-term economic objectives.
Strategic product offerings
As part of its strategic offerings, ADIB provides a robust array of Sharia-compliant products specifically designed for SMEs, which includes foreign exchange services, business financing, treasury solutions, and more.
This partnership complements ADIB’s ongoing initiatives, such as the launch of ADIB Business Souq, a comprehensive digital marketplace aimed at significantly reducing the cost of doing business by offering a variety of exclusive offers and discounts.
Innovative credit guarantee scheme
EDB’s Credit Guarantee Scheme serves as an innovative de-risking solution intended to encourage commercial banks to extend financing to eligible SMEs that may encounter difficulties in securing funds due to perceived risks and long-term returns on investment (ROI). By collaborating with commercial banks, EDB provides partial guarantees of up to 50 percent of the financing extended to SMEs, capped at AED10 million.
Demonstrated impact
The impact of this initiative is already evident, with EDB facilitating AED1.58 billion ($430 million) in financing through the Guarantee Scheme, which has directly contributed to the creation of 4,000 jobs. Since the launch of EDB’s strategy in April 2021, the bank has significantly enhanced the financial inclusion of SMEs.
Fostering growth and sustainability
Moreover, by helping SMEs establish positive credit histories, the scheme enables them to access future financing, thereby fostering growth and sustainability. EDB’s innovative, partnership-driven approach is further supported by its proprietary Development Impact Scorecard, which evaluates the financial and developmental potential of each loan, ensuring alignment with national economic and sustainable development goals.
ADIB’s involvement strengthens the Guarantee Scheme’s reach, supporting EDB’s goal to provide AED30 billion in financing assistance by 2026, in line with the UAE’s national economic and sustainable development objectives.
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