Emirates Islamic, one of the leading Islamic financial institutions in the UAE, recently became the first Islamic bank to sign an agreement with Emirates Development Bank (EDB) to be part of its ‘Credit Guarantee Scheme’.

The agreements reflects both the banks’ shared commitment to support the growth of small-to-medium enterprises (SMEs) in the UAE, said a statement.

EDB’s AED 100 million Credit Guarantee Scheme supports the goals of the National Agenda under UAE Vision 2021, focused on boosting the GDP contribution of SMEs to 70 per cent by 2021 and is aligned with the UAE’s push towards economic diversification and building a post-oil economy, it said.

The initiative offers financing of up to Dh2 million ($544,470) to startups through EDB’s partner banks, wherein EDB guarantees up to 85 per cent of the finance amount. The scheme also offers up to Dh5 million ($1.36 million) financing to existing SMEs, with EDB guaranteeing up to 70 per cent of the finance amount.

The new partnership builds on Emirates Islamic’s commitment towards supporting the SME sector, which represents more than 94 percent of the total number of companies operating in the UAE and employs over 86 per cent of the private sector workforce, according to the Ministry of Economy.

SMEs are a key driver of Emirates Islamic’s growth strategy, and the bank offers a wide range of business banking products and services tailored to meet the needs of companies of various sizes and backgrounds.

Salah Amin, CEO of Emirates Islamic, said: “We are proud to sign this agreement with EDB, which will greatly boost access to financing and improve the business environment for SMEs.”

“For us supporting the SME sector is a top priority, and we will continue to offer them the best in banking solutions, supported by best in class customer service,” he added.

Faisal Al Bastaki, chief executive officer of EDB, said: “We designed our latest scheme based on the needs of SMEs, and it is aligned with EDB’s commitment to create and offer an integrated portfolio of innovative financing products and solutions, which enhance SMEs’ access to capital.”

“The SME sector is a major driver to the growth of the national economy and will boost the UAE’s global competitiveness. As part of our ongoing strategy, we are committed to developing banking solutions that will enable SMEs to effectively contribute to increasing the non-oil GDP and advancing economic diversification,” he added. – TradeArabia News Service