Ajman Bank and the Emirates Development Bank (EDB) have signed a memorandum of understanding (MoU) to offer credit guarantee and co-lending for SMEs in the UAE.
The partnership aims to boost the small and medium sized enterprise (SME) ecosystem and the industrial sector in the UAE, increasing its contribution to the country’s gross domestic product.
“Access to finance is vital for the growth of business. We believe as part of this MoU more businesses especially the small and medium size enterprises in the UAE will have access to the benefits of our unique financial products and services that will contribute to boost the country’s development,” said Mohamed Amiri, CEO of Ajman Bank.
“The increased financial accessibility to the SMEs – the backbone of the country’s economy – will not only help them develop and grow their business but also boost their contribution to UAE’s non-oil GDP,” said Ahmed Mohamed Al Naqbi, CEO of EDB.
As part of the MoU, EDB will provide credit guarantee and/or co-lending programs to Ajman Bank’s SME customers. Ajman Bank will offer up to AED 10 million financing to SMEs and 50 percent of the facility amount will be either guaranteed or co-lent by EDB.
The collaboration will also support UAE citizens in their start-up journeys by offering financing facilities of up to AED1m, wherein 60 percent is guaranteed or co-lent by EDB.
“Our collaboration with the Emirates Development Bank will bring together our collective resources and comes at a decisive moment for economic recovery after the pandemic which is ultimately aimed at helping the business community,” Amiri added.
The credit guarantee and co-lending program is part of a robust platform that EDB has worked out with Ajman Bank to increase their financial lending for the SME segment, with focus on the priority industrial sectors, including manufacturing, healthcare, infrastructure, food security and technology.
“Emirates Development Bank is committed to bridging the funding gap for SMEs operating in key sectors and as part of this endeavour, we are pleased to work closely with Ajman Bank. Together, we aim to support companies and entrepreneurs to have access to wider financing options, which will serve the country’s efforts of building a knowledge-based economy and contribute to sustainable economic development,” Al Naqbi added.
The MoU with Ajman Bank is aligned with EDB’s recently-unveiled strategy, offering direct and indirect lending for, an investment arm for start-ups and SMEs, as well as business advisory services for entrepreneurs, start-ups and small companies.
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