The Emirates Development Bank has signed a pact with Dubai's Beehive to help SMEs get more funding.The state-owned Emirates Development Bank (EDB) and Dubai-based Beehive have struck an agreement to increase lending to small and medium-sized businesses in critical industries in the UAE.
Quoting an EDB statement, Beehive, a peer-to-peer platform, will provide business loans to "creditworthy" SMEs wanting to grow their operations or boost working capital through Dh30 million ($8.16 million) in money allocated by EDB.
It's part of the EDB's effort to enable SMEs in the UAE contribute significantly more to the country's economy.In a statement, Ahmed Mohamed Al-Naqbi, the bank's CEO, said, "The collaboration with Beehive is part of our commitment to bridge the funding gap by enabling SMEs better and simpler access to financial sources."
Beehive is a crowdfunding platform that connects small firms with retail investors, but it has recently grown to accommodate institutional investors like the EDB.“The inclusion of institutional investors to Beehive will provide SMEs with more safe financing and better liquidity on the platform, allowing for faster funding,” said Craig Moore, the company's creator.
Emirates Development Bank
The Emirates Development Bank (EDB) was established in 2011 as a result of a merger between the Emirates Industrial Bank and the Real Estate Bank. It seeks to provide Dh30 billion in finance over the next five years to help the UAE achieve its goal of more than doubling its industrial sector by 2031. It will help create 25,000 employment by funding areas such as healthcare, infrastructure, food security, and technology.
The Beehive platform connects SMEs with investors eager to fund their initiatives via the use of crowdfunding.
Small businesses and start-ups commonly use crowdsourcing to raise funds to launch new initiatives or secure expansion capital to expand.
According to Statista research, the worldwide crowdfunding market is expected to quadruple in size from $13.9 billion in 2019 to $39.8 billion in 2026. The concept, which originated in the United States, is gaining support in the Gulf Cooperation Council (GCC).
Benefit by Collaboration
EDB has awarded Dhs30 million in finance to qualified SMEs using the Beehive platform. Meanwhile, Beehive will help creditworthy SMEs develop their operations or increase their working capital by facilitating business business loans. The EDB plan is to assist SMEs in obtaining financing and expanding their businesses, thereby increasing their contribution to the UAE's non-oil GDP to over 70% by 2021, as well as increasing in-country value, productivity, and employment.
According to a statement, the announcement follows EDB's promise to support SMEs, startups, and major corporations in five key areas over the next five years, including manufacturing, healthcare, infrastructure, food security, and technology.
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