Dubai's ruler Sheikh Mohammed bin Rashid Al Maktoum on Wednesday issued a law to establish a new fund for small and medium sized enterprises (SMEs).
Sheikh Mohammed, also vice president and prime minister of the UAE, has ordered the setting up of the Mohammed bin Rashid Fund.
The fund will work alongside the Mohammed Bin Rashid Establishment for small and medium sized enterprises development (MBRE), one of the institutions run by the Dubai Department of Economic Development, news agency WAM reported.
The fund aims to support and finance projects of young entrepreneurs and 100 projects will be financed every year, it said without giving a value for the fund.
The fund will be mandated to give loans, provide financial guarantees or to contribute to the projects.
It will also have the mandate to attract financial and technical support for projects undertaken by community members or companies and institutions operating in the country.
The fund will also monitor "the commitment of the entrepreneurs who receive support" to ensure they abide by the standards and controls specified.
On Tuesday, Emirates NBD said it expects lending to small businesses to double and top AED1bn ($272m) next year as Dubai's largest bank diversifies away from corporate and personal financing.
Suvo Sarkar, ENBD's head retail banking, said the lender has a quarter of the market in lending to small and medium enterprises (SMEs) in the UAE.
Banks in the UAE are increasingly focusing on small business lending following restrictions from the central bank on personal loans for individuals.
Corporate lending in the country has suffered during the past three years as companies grappled with debt.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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