Abu Dhabi unveils Dh6b financing initiative
Move aimed at increasing liquidity for SMEs
The Abu Dhabi Department of Finance yesterday announced a Dh6 billion supply chain financing initiative to support a variety of sectors, as a key initiative in its commitment to support small and medium enterprises (SMEs).
The first phase of this initiative is in partnership with the National Health Insurance Company (Daman) and First Abu Dhabi Bank (FAB), aiming to provide liquidity to SMEs in the health care sector.
“SMEs are the lifeblood of the economy, and key to long-term sustainable growth for the Emirate of Abu Dhabi. As part of our forward-looking fiscal sustainability strategy, we are proactively launching this initiative in order to underpin continued liquidity for SMEs in Abu Dhabi,” said Jasem Mohammad Bu Ataba Al Zaabi, Chairman of the Abu Dhabi Department of Finance.
Funded by Ghadan 21’s SME credit guarantee scheme, the initiative is a demonstration of Abu Dhabi’s significant commitment to sustain and support SMEs – throughout Covid-19 and beyond
– and will initially support SMEs in the health care sector, before being extended to include other banks and sectors.
“The UAE has made remarkable strides as a leading nation in the global health care landscape. This would not be possible without the vital contributions of the many important SMEs within the health care sector. We are pleased to partner with the Department of Finance and FAB to ensure business continuity and liquidity for those committed to protecting the health and safety of Abu Dhabi citizens and residents,” said Hamad Al Mehyas, Chief Executive Officer, Daman.
Reduces cost
The initiative is of significant benefit to SMEs as it facilitates quick payment of their receivables, thus reducing their costs of working capital. In 2019, SMEs in Abu Dhabi accounted for 29 per cent of GDP and 44 per cent of the nonoil economy – supporting such businesses is a critical element of Abu Dhabi’s diversification strategy to move towards a knowledge-based economy.
“FAB is fully committed to the economic objectives of Abu Dhabi, including supporting the ongoing development of a world leading health care ecosystem within the Emirate. This initiative will provide SMEs in the Emirate with the necessary liquidity to continue their sustainable growth while maintaining health care supply chains throughout the Covid-19 pandemic response and beyond,” said André Sayegh, Group Chief Executive Officer, FAB.