Emirates Development Bank and ADIB Boost SME Financing in the UAE

In a significant development for the UAE’s business sector, Emirates Development Bank (EDB) and Abu Dhabi Islamic Bank (ADIB) have formed a strategic partnership to enhance access to financing for small and medium enterprises (SMEs). SMEs represent a major part of the UAE’s economy, accounting for around 94% of the country’s companies and contributing close to 52% to the nation’s Gross Domestic Product (GDP). This collaboration is part of the UAE’s broader effort to promote financial inclusion, bolster economic growth, and drive the expansion of sustainable and Islamic finance-based solutions.

Empowering SMEs

ADIB and EDB have launched a joint finance guarantee scheme to improve SME access to finance. The scheme’s primary objective is to make financing more accessible to SMEs in five key sectors: manufacturing, food security, advanced technology, healthcare, and renewables. These sectors are vital to the UAE’s economic diversification strategy and aligned with its national vision for long-term, sustainable growth. Under the scheme, EDB will guarantee up to 50% of the financing that ADIB extends to SMEs in these sectors.

Such financial backing helps reduce perceived lending risks for commercial banks, enabling them to provide much-needed capital to SMEs that might otherwise struggle to secure funding. This approach encourages banks to be more flexible and willing to offer financing to SMEs, recognizing their role as key drivers of economic growth and innovation in the UAE.

Key Leaders of ADIB and EDB

The collaboration between EDB and ADIB has been hailed as a critical step toward fostering SME growth and financial inclusion across the UAE. His Excellency Ahmed Mohamed Al Naqbi, the Chief Executive Officer of Emirates Development Bank, highlighted the importance of this partnership in promoting economic progress. “Our partnership with ADIB is a significant milestone in our ongoing efforts to foster SME growth and financial inclusion in the UAE. By extending our finance guarantee scheme to more commercial banks, we are helping businesses overcome financial barriers and achieve their full potential. This initiative sets an example of how strategic partnerships can drive sustainable and inclusive economic growth,” he stated.

Mohamed Abdelbary, Acting Group CEO of Abu Dhabi Islamic Bank, echoed similar sentiments, underscoring ADIB’s commitment to empowering SMEs as the backbone of the UAE’s economy. “We are committed to empowering SMEs, the backbone of the UAE’s economy. By working closely with EDB, we’re expanding our support through customized Sharia-compliant financial solutions, enabling growth-oriented businesses to scale, innovate, and align with the UAE’s broader economic goals,” Abdelbary remarked.

By collaborating with EDB, ADIB aims to amplify its ability to provide a wider array of financial solutions that comply with Islamic principles, thereby addressing the unique financial needs of SMEs across different industries.

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ADIB’s Suite for SMEs

Abu Dhabi Islamic Bank (ADIB) is renowned for offering various Islamic financial solutions tailored for SMEs. The bank provides a variety of services, including foreign exchange (FX) services, business finance, treasury solutions, and much more. Additionally, ADIB has developed ADIB Business Souq, an all-in-one digital marketplace designed to significantly reduce the cost of doing business in the UAE. The platform offers SMEs a host of exclusive deals and discounts on various essential services, aiming to help them save on operational costs while improving efficiency.

This partnership with EDB enables ADIB to extend its reach and strengthen its support to SMEs by offering innovative financial services that not only meet their business requirements but also align with Islamic finance principles. This move reinforces ADIB’s status as a trusted financial partner for businesses focused on sustainable growth and development within the UAE’s dynamic economy.

EDB’s Credit Guarantee Scheme

Emirates Development Bank (EDB) has been a significant player in promoting financial inclusion and economic diversification in the UAE. Its Credit Guarantee Scheme is one of its flagship initiatives to encourage commercial banks to extend financing to eligible SMEs. The scheme provides partial guarantees—up to 50% of the financing extended to SMEs—with a cap of AED 10 million per business. By reducing the perceived risk for banks, this scheme incentivizes more financial institutions to support SMEs, especially those with significant growth potential but limited access to traditional financing.

Since the introduction of EDB’s Credit Guarantee Scheme in April 2021, the impact has been substantial. To date, EDB has provided approximately AED 1.58 billion in financing through the scheme, which has directly supported the creation of more than 4,000 jobs across the UAE. This progress highlights EDB’s commitment to aligning its efforts with the UAE’s national economic priorities, particularly in areas related to sustainable development and financial inclusion.

A key feature of the Credit Guarantee Scheme is EDB’s proprietary Development Impact Scorecard. This tool measures the financial and developmental potential of each lending opportunity, ensuring that the financing provided aligns with the UAE’s broader economic and sustainability goals. By helping SMEs establish a positive credit history and achieve sustainable growth, EDB aims to drive long-term economic development and help businesses thrive in a competitive market environment.

Amplifying Financial Support

Abu Dhabi Islamic Bank’s involvement in this strategic partnership plays a pivotal role in enhancing the reach and effectiveness of EDB’s Credit Guarantee Scheme. ADIB, being one of the leading Islamic banks in the UAE, brings a wealth of experience and a client-centric approach to Islamic finance. This collaboration allows ADIB to further extend its support to SMEs and aligns with the UAE’s vision of providing AED 30 billion in financing by 2026 to bolster economic growth.

The joint efforts of ADIB and EDB not only provide financing options but also enable SMEs to access resources and support necessary for their development and growth. This holistic approach ensures that SMEs are well-equipped to contribute to the UAE’s economic landscape and that they receive financial services tailored to their specific needs.

About EDB

Established in 2011, Emirates Development Bank (EDB) is a key financial engine of economic development and industrial advancement in the UAE. The bank focuses on providing financial and non-financial support across various priority sectors, including advanced technology, food security, healthcare, renewables, and manufacturing. EDB’s mission is to drive economic competitiveness and sustainable growth by providing comprehensive banking solutions to businesses of all sizes—from startups and SMEs to large corporations.

About Abu Dhabi Islamic Bank

Abu Dhabi Islamic Bank (ADIB), established in 1997, is one of the UAE’s leading Islamic financial institutions. With total assets amounting to AED 213 billion, ADIB provides a wide range of financial services, including retail, corporate, private banking, and wealth management solutions. The bank has a global presence in strategic markets, such as Egypt—where it has over 70 branches—as well as in Saudi Arabia, the United Kingdom, Sudan, Qatar, and Iraq.

ADIB has received global recognition for its innovative products and services, earning titles such as the “World’s Best Islamic Bank” by The Financial Times – The Banker publication. Some of its acclaimed offerings include the award-winning Ghina savings account and a range of co-branded cards in partnership with major airlines like Emirates and Etihad. By joining hands with EDB in this strategic initiative, ADIB aims to reinforce its commitment to supporting the UAE’s SME sector through innovative, Sharia-compliant financial services that enable businesses to achieve their full potential.

A Promising Future for SMEs in the UAE

The collaboration between Abu Dhabi Islamic Bank and Emirates Development Bank is poised to make a substantial impact on the UAE’s SME sector. By facilitating greater access to financing through Islamic banking solutions, the partnership is set to empower SMEs, enabling them to scale, innovate, and contribute meaningfully to the UAE’s broader economic and sustainability goals. As the nation continues to advance toward its vision for diversified economic growth, partnerships like this one will be crucial in shaping a prosperous future for businesses of all sizes.