Emirates Development Bank and Dubai Islamic Bank sign MoU on credit guarantee for SMEs


Abu Dhabi: The Emirates Development Bank [EDB], a key financial enabler of the country’s economic diversification and industrial transformation agenda, and Dubai Islamic Bank [DIB] – the largest Islamic bank in the UAE and the second largest Islamic bank in the world, have signed a Memorandum of Understanding (MoU) on credit guarantee scheme offered to the small and medium enterprises (SMEs) in the UAE.

The MoU between EDB and DIB reinforces both parties ongoing commitment to support the SME ecosystem and increases their contribution to the nation’s GDP by offering strategic financing solutions. Ahmed Mohamed Al Naqbi, Chief Executive Officer of EDB, signed the MoU with Dr. Adnan Chilwan, Group Chief Executive Officer of DIB.

The new scheme provides a solid platform for emerging national companies and entrepreneur to explore new opportunities through innovation such as smart industries and it will assist SMEs and startups in the UAE to overcome the financial challenges of accessing funding from the banks. The platform allows EDB and DIB to increase their financial lending for the SME segment, with a particular focus on priority industrial sectors — namely manufacturing, healthcare, infrastructure, food security and technology.

In an effort of increasing the number of SMEs by providing easy financial solutions, and developing the existing SMEs while also establishing a credit history with the banks to allow for sustainable funding in the future, the scheme offers these solutions to SMEs owned 51-100% by UAE National, all expats in priority sectors such as: Healthcare, Manufacturing, Agriculture and Technology while focusing on entities that operate in the country.

Within the scope of the MoU, EDB will provide the credit guarantee program to DIB’s SME customers, while DIB will offer up to AED 10 million financing, with half of the facility amount being guaranteed by EDB.  DIB will aim to disburse a total of AED 200 million in financing with a focus on UAE Nationals and priority sectors under this scheme.

Speaking of the MoU, Ahmed Mohamed Al Naqbi, said: “Emirates Development Bank is committed to supporting the UAE’s economic diversification strategy. To achieve this, one of the pivotal steps is to bridge the funding gap for SMEs, particularly those operating in priority economic sectors. EDB is pleased to sign the MoU with Dubai Islamic Bank to facilitate easier access to financial sources for the SMEs, strengthening the ecosystem and supporting UAE’s goals to build a robust knowledge-based economy, and contributing to sustainable economic development.”

Welcoming the agreement, Dr. Adnan Chilwan said: “DIB has always been an active supporter of the UAE economy, aligning itself closely with the vision of the leadership to nurture and grow the business sector. Cultivating strong and trusted relationships and identifying opportunities to grow the SME ecosystem and has seen us contribute to the ongoing success and wealth of the nation.

“Our insight, experience and expertise provide the ideal platform from which to drive the growth of new start-ups and of established SMEs businesses, and we welcome the opportunity to partner with EDB on further enhancing our award-winning business banking experience.”

The MoU is aligned with EDB’s recently-unveiled strategy, offering direct and indirect lending for SMEs (Supply Chain, Project and Long-term Finance), an investment arm for startups and SMEs (accelerator, equity finance, business growth fund) as well as business advisory services for entrepreneurs, startups and small companies (coaching, consulting, mentoring, market research).

Similarly, DIB’s backing for this initiative complements its broader support for the UAE’s vision of creating a diverse and dynamic SME sector founded on innovation, stability and economic growth.

About Emirates Development Bank

Emirates Development Bank [EDB], headquartered in Abu Dhabi, was established under Federal Law by Decree No. 07 of 2011 issued by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE. It became operational in June 2015. The Bank unveiled its new strategy in 2021 reinforcing its identity as one of the key drivers of the UAE’s economic recovery. EDB offers financial and non-financial support to SMEs, startups and large corporates operating in strategic priority sectors in the UAE, as a step to boost their contribution to the country’s non-oil GDP. The Bank also provides home finance support to the UAE Nationals. EDB operates two branches in Abu Dhabi and Dubai.

About Dubai Islamic Bank:

Established in 1975, Dubai Islamic Bank is the largest Islamic bank in the UAE by assets and a public joint stock company listed on the Dubai Financial Market. Spearheading the evolution of the global Islamic finance industry, DIB is also the world’s first full service Islamic bank and the second largest Islamic bank in the world. With Group assets in excess of USD 75bln and market capitalization of more than USD 10bln, the group operates with a workforce of more than 10,000 employees and around 500 branches in its vast global network across the Middle East, Asia and Africa. Serving over 5 million customers across the Group,

DIB offers an increasing range of innovative Shariah compliant products and services to retail, corporate and institutional clients.

In addition to being the first and largest Islamic bank in the UAE, DIB has a significant international presence as a torchbearer in promoting Shariah-compliant financial services across a number of markets worldwide. The bank has established DIB Pakistan Limited, a wholly owned subsidiary which is the first Islamic bank in Pakistan to offer Priority & Platinum Banking, as well as the most extensive and innovative portfolio of Alternate Distribution Channels. The launch of Panin Dubai Syariah Bank in Indonesia early in 2017 marks DIB’s first foray in the Far East, the bank owns over 25% stake in the Indonesian bank. Additionally, in May 2017, Dubai Islamic Bank PJSC was given the license by the Central Bank of Kenya (CBK) to operate its subsidiary, DIB Kenya Ltd. DIB has been designated as D-SIB (Domestic Systemically Important Bank) in 2018 in UAE. In early 2020, DIB completed the acquisition of Noor Bank, which solidifies its position as a leading bank in the global Islamic finance industry. In 2021, DIB increased its foreign ownership limit to 40% reflecting the increasing confidence of global investors towards the bank.

The Bank’s ultimate goal is to make Islamic finance the norm, rather than an alternative to conventional banking worldwide. DIB has won a range of accolades that are testament to these efforts across diversified areas, including retail, corporate and investment banking, as well as CSR and consultancy services. DIB has been named the Best Islamic Bank in various prestigious ceremonies and recognized for its outstanding performance amongst the world’s Islamic Banks, marking it a clear indication of the bank’s leadership position in the Islamic finance sector.