A preliminary deal has been inked by the state-owned lender Emirates Development Bank, which focuses on funding the UAE's priority industries, to introduce supply-chain financing and working capital solutions for the nation's small and medium-sized businesses. The initiative is a part of EDB's efforts to support start-ups through its network of governmental and corporate partners, the lender said. It is being carried out in cooperation with Trade Capital Partners (TCP), an Abu Dhabi-based technology platform that offers working capital finance solutions to SMEs.
The two parties will form a working group to investigate how to provide supply-chain financing, which lowers the risk of interruption and enables both buyers and suppliers to optimize working capital, as per the agreement made possible by Hub71, Abu Dhabi's tech ecosystem.
“We are constantly looking at new and innovative ways to support SMEs, which contribute more than 60 per cent of the UAE's non-oil GDP [gross domestic product],” said Shaker Zainal, chief business officer at EDB.
“We will leverage our expertise combined with TCP's platform to jointly bring more financing solutions to a wider range of businesses. This [pact] reflects our value of excelling through partnerships and will further support the growth of SMEs and promote innovation in the UAE.”
EDB offers a "patient debt approach" with a focus on quickening the nation's speed of growth. The bank offers lengthier tenors, larger loan-to-value ratios, lower rates, and interest payment grace periods for both direct and indirect financing. The lender is at the center of the UAE's initiatives to support the expansion of SMEs and start-ups in the second-largest economy in the Arab world.