- Abu Dhabi’s momentous plan to introduce a government guarantee regarding all funding of loans to the small and medium-sized enterprises (SMEs) can “change the business landscape” within the Emirates and will encourage different governments in the region to imitate, in accordance with the chief executive board chairman of Wamda Capital, Fadi Ghandour.
- Abu Dhabi Investment Office (ADIO), the Department of Finance and first Abu Dhabi Bank launched the SME Credit Guarantee theme recently. The SME Growth Loan can give a lot of accessible funding opportunities for SMEs based mostly in United Arab Emirates capital through a guarantee given by the govt to banks.
The theme relieves SMEs of the danger related to raising capital from banks. It guarantees up to 70 percent of loans value for UAE national-owned corporations and up to 60 percent for expat-owned companies, which can be provided to the bank just in case of default, facilitating the banks to secure a precise level of lending to the market.
Ghandour presently manages investments in early-stage start-ups through angel fund Mena Venture Investments. He stated to the Arabian Business journal: “SMEs have traditionally faced immense challenges in accessing finance, this initiative addresses this challenge, so matching the importance of the arena with facilitating finance becomes all the more crucial, thus, permitting SMEs to thrive. Banks are very conservative so that the government steps in and lighten the enormous part of that risk.
“Finally, this can be happening; it’ll make certain amendments to the business landscape within the Emirate and perhaps get others to try to do equivalent work.”
The announcement is a component of the Government’s Ghadan 21 economic acceleration program declared last September month by ruler Sheikh Mohammed bin Zayed Al Nahyan, crown prince of United Arab Emirates capital and Deputy Supreme Commander of the UAE military.
It comes because the government strives to extend the share of SMEs’ activity in the United Arab Emirates capital from 16 to 23 percentage by 2021.
Ghandour, who founding partner of Maktoob.com before it had been acquired in a deal by Yahoo! for $165 million in the year 2010, stated that, “I suppose this can be a very vital move by the United Arab Emirates capital Government, as it acknowledges the importance of SMEs as engines of growth within the economy, and because the primary sector for generating new employment.”
The news came on an equivalent day that Hub71 declared the first four start-ups that conceive to commence the operations within the technology hub.
Hub71, settled in United Arab Emirates capital Global Market Square on Al Maryah Island, is powered by Mubadala, Microsoft, United Arab Emirates capital world Market with the backing of the Ghadan 21 program that is functioning to accelerate Abu Dhabi’s economy.
The technical school hub aims to foster start-up success, innovation and growth and is unambiguously positioned to pile up government entities, firms, lecturers and start-ups. Mahmoud Adi, chief executive officer of Hub71, said: “When you concentrate on that SMEs form up 53 percentage of the GDP value within the UAE, we hope, as a technical eco powerhouse, that we’ll facilitate to each – increase that percentage point and make sure that the prevailing 53 percentage SME’s have the most effective opportunities to grow.”