Tess extension to give UAE SMEs more relief
dubai — Residents and small and medium-sized enterprises (SMEs) can expect the support that they have received from financial institutions to continue with the extension of the Targeted Economic Support Scheme (Tess) by the Central Bank of the UAE.
Several financial institutions applauded the move, saying that the initiative will further shield customers, SMEs and corporate banking clients, and provide them with a huge confidence boost as they work to rebound from the Covid-19 slowdown earlier this year.
“The decision taken by the Central Bank of the UAE to extend its Targeted Economic Support Scheme for another six months is a prudent move that will accelerate recovery and aid the local economy and provide much needed support to individuals and businesses,” said Ahmed Abdelaal, group CEO of Mashreq Bank.
“The measures undertaken by the central bank will help alleviate financial stress and ensure a smooth flow of credit thereby assisting banks in the UAE better fund their corporate, SME and retail customers.”
“At Mashreq, we continue to develop various initiatives to support our customers across business segments, most notably, helping to restructure or defer their liabilities in line with their cash flow, waiving fees, extending loan repayment periods, reducing cash advance charges and avoiding suspending accounts,” he added.
The scheme was first launched in March 2020 to support individuals and private sector firms through a range of integrated relief measures to the banking sector related to funding, liquidity, lending, and capital.
The Tess Facility cannot be used to assist clients that are already in default on their existing loans, are not resident in the UAE, are unaffected by the pandemic, or are government entities.
Lenders are required to provide evidence to the central bank that the funds from the Tess facility are being used to defer payments of principal and interest on outstanding loans for their clients.
Tess requires that specific submissions confirming the use of funds be submitted to the central bank by the head of the relevant bank’s compliance department. Failure to provide the required evidence will result in the bank being liable to pay a default rate of 10 per cent per annum on the amount that it has borrowed.
The decision...is a prudent move that will accelerate recovery and aid the local economy and provide much needed support to individuals and businesses Ahmed Abdelaal,
Group CEO of Mashreq Bank