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Dubai International Growth Initiative Unlocks Dh500M to Fuel SME Growth: Here's Everything You Need To Know

Dubai International Growth Initiative Unlocks Dh500M to Fuel SME Growth: Here's Everything You Need To Know
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The Dubai International Growth Initiative marks a pioneering effort by the Government of Dubai and the Emirates National Bank of Dubai (Emirates NBD).

Launched by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, the initiative aims to bolster Dubai-based small and medium enterprises (SMEs) in their expansion to global markets. With an initial allocation of AED500 million, five priority sectors will benefit from the initiative. Aligning with the visionary objectives of Dubai Economic Agenda D33, the Dubai International Growth Initiative will fortify Dubai’s position as a thriving international business hub.

Rohit Garg, Group Head of Business Banking at Emirates NBD

In an exclusive interview, Rohit Garg, Group Head of Business Banking at Emirates NBD, sheds light on the groundbreaking Dubai International Growth Initiative and its pivotal role in supporting SMEs.

Can you provide an overview of the Dubai International Growth Initiative, its objectives, and the financial support it offers? 

Dubai International Growth Initiative is a first-of-its-kind initiative to support Dubai-based SMEs. It has been launched by the Government of Dubai in conjunction with Emirates NBD. Currently, the biggest challenge that SMEs face when expanding internationally is the availability of capital. The Government of Dubai and Emirates NBD are looking forward to solving this problem to facilitate the global expansion of Dubai-based SMEs. The initiative offers financial support to these SMEs by offering them up to AED15 million of subsidized rate funding at the EIBOR interest rate. Businesses in the five priority sectors identified by the Government of Dubai will benefit from the initiative.

What is the total amount of funding for SMEs provisioned under the Dubai International Growth Initiative?

The initiative has an initial corpus of 500 million that has been earmarked for it by Emirates NBD.

Do all businesses from the UAE qualify for this funding?

This initiative is open to all SMEs founded in Dubai, provided they meet certain criteria. The business must have been operating for at least five years, have been profitable for the last three years, and possess audited financial statements. The cash flow of the business should be sufficient to support international expansion. This is to ensure that during the initial stages when revenue from the international venture may be limited, the UAE-based operations can sustain the repayment of the facility. Additionally, international expansion should be a feasible option for the SME.

Are only businesses owned by UAE nationals eligible, or are expat-owned companies eligible too?

This government initiative is open to SMEs of all nationalities, provided they are founded in Dubai.

Is there a lower and upper limit on SMEs' annual revenue that qualifies them for this funding? 

We are following the guidelines set by the UAE Central Bank, which generally stipulate an annual sales turnover of around 250 million. There is no specific minimum turnover required.

Which sectors of SMEs will qualify for funding through this program?

In the first phase, the initiative is open to businesses in five sectors: FMCG, food and beverage, e-commerce, manufacturing, services and retail, including parts and machinery.

What is the role of the Government of Dubai and Emirates NBD in the Dubai International Growth Initiative?

It is a collaboration between the Government of Dubai and Emirates NBD. A Joint Steering Committee has been established to oversee the progress of all the initiatives. Additionally, the committee will guide the selection of customers and ensure adherence to the initial mandate.

Is this funding limited only to the international foray of SMEs? 

Yes, the funding is to facilitate the international foray for Dubai-based SMEs. It will support the businesses’ capital expenditure, international expansion efforts, and initial operational expenses.

What is the interest rate for this funding? 

For the first phase, this initiative offers a subsidized interest rate, pegged at EIBOR (Emirates Interbank Offered Rate). Essentially, this means that SMEs are receiving funding at the same rate at which banks lend to each other, which is a very progressive step as it provides them with a subsidized interest rate.

What is EIBOR? What is the current % of EIBOR?

EIBOR stands for Emirates Interbank Offered Rate. It is the rate at which banks lend to each other. For SMEs, this implies borrowing at a highly subsidized interest rate. The current three-month EIBOR stands at approximately 5.2% [on 23rd April 2024].

How is Dubai International Growth Initiative different from regular business loans?

This initiative is specifically designed to help Dubai-founded SMEs to grow internationally. Recognizing the challenges SMEs face, particularly regarding interest rates, this initiative marks the first of its kind to offer a subsidized rate. The fund is being offered at EIBOR (Emirates Interbank Offered Rate). Therefore, the SMEs get their funds at the same rate that a bank gets.

What is the minimum and maximum funding per business through the Dubai International Growth Initiative? 

There is no minimum but the maximum limit is set around 15 million per SME to encourage as many customers as possible to utilize this facility.

Do SMEs need to offer any collaterals for this funding? 

Standard credit policy applies to these credits, which means collateral requirements may vary based on the financial health and credit standing of the applicant.

Can you elaborate on the application process for SMEs accessing funding through the Dubai International Growth Initiative? 

The application process is straightforward. Those interested in availing of this facility simply need to visit our website and answer five qualification questions. Upon qualification, they can register their interest, and our relationship managers will contact them within one day.

What documents need to be submitted by SMEs?

Standard documentation is required. This includes a three-year audited balance sheet, a feasibility study for expansion into international markets, cash flow statements, inventory reports, and other relevant financial documents.

Suppose a company applies today and provides all the documents within a week. If they qualify, what will be the lead time for this funding's approval and actual money coming to the business account?

We aim to make the funds available to the SME within a very short timeframe. Initially, the approval process may take about 5 to 7 days at most. Subsequently, once the documentation is completed, we anticipate another 5 to 7 days for the funds to be disbursed. The maximum turnaround time would be about two weeks.

Do you inform rejected applicants of the reasons?

Yes, we do inform the applicants if we are unable to provide the funding under the Dubai International Growth Initiative. Additionally, we work with them to see if they are eligible for funding through the normal credit program of Emirates NBD.

Can you explain the role of the Joint Steering Committee in overseeing the implementation of the initiative? 

The Joint Steering Committee oversees the functioning of this initiative. They meet periodically to ensure that the current sectors are being targeted and that the SMEs receiving this funding are indeed based in Dubai and are utilizing it for international expansion.

How does Emirates NBD ensure transparency and fairness in selecting eligible SMEs for funding? 

The role of the Joint Steering Committee is precisely to ensure a uniform application of policy and fair treatment for everyone.

How do you envision the Dubai International Growth Initiative contributing to the overall economic growth and development of Dubai? 

Dubai, with its dynamic nature, is currently targeting an expansion agenda under the D33 initiative. This initiative contributes to the D33 agenda by enabling the expansion of SMEs founded in Dubai to international markets. The five sectors that are part of this initiative are high-growth sectors where there is a lot of action happening. Hopefully, this initiative will facilitate the expansion of these SMEs globally.

Watch the full interview:

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