- Middle East
- Emirates Development Bank receives AA- Rating from Fitch for its Home Finance Plans
Emirates Development Bank Receives AA- Rating From Fitch For Its Home Finance Plans
DUBAI, (UrduPoint / Pakistan Point News / WAM - 16th Sep, 2018) The Board of Directors of Emirates Development Bank (EBD) has held its fifth meeting for 2018 at the Bank's headquarters in Dubai under the chairmanship of His Excellency Obaid Humaid Al Tayer, Minister of State for Financial Affairs and Chairman of the EDB Board of Directors. The governing body discussed the items on the agenda and made a number of important decisions. The financial statement for the first half of 2018 showed that the Bank has accomplished a number of operational and financial achievements during this period, which will contribute to improving the financial performance and growth of the Bank's loan portfolio in the coming years.
In an unprecedented step, the Emirates Development Bank has been awarded a Fitch AA- rating, the Bank is thus the first fully owned federal institution to have such a credit rating, which indicates the Bank's solid financial position and credit strength.
H.E. Obaid Humaid Al Tayer expressed his pride in the Bank's attainment of this outstanding credit rating, calling it recognition of the great efforts exerted to achieve the best results, and motivation to continue to implement the Bank’s strategic plans in line with the national agenda of the United Arab Emirates and with UAE Vision 2021.
The Board of Directors of the Bank approved the launch of the AED50 million “Start-Ups Finance” programme. The programme aims to provide UAE entrepreneurs with the necessary financing to build and develop their businesses, supporting entrepreneurship and emerging companies and enhancing the contributions of the private sector to economic development in the UAE.
Emirates Development Bank will provide SME financing to start-up businesses of at least 51% Emirati ownership by offering loans up to AED2 million with competitive rates. This programme is a pioneering step to address the challenges of obtaining bank credit to finance projects, enhancing the investment market, improving the business environment and boosting the country's rating in the credit access index.
His Excellency stated: “The launch of the “Start-Ups Finance” programme reflects the Bank's commitment to implement its plans and strategies for sustainable financial development. We are confident that this programme will help to enable companies and projects owned and managed by Emiratis to receive financing and banking solutions with the aim of increasing competitiveness and facilitating business, which will further the growth of the SME sector, a key pillar of the national economy.
"His Excellency confirmed that the SME financing products have achieved the desired success in terms of granting credit approvals for small and medium enterprises totaling AED380 million up to 31 st August, 2018. Emirates Development Bank facilitates financing of up to AED30 million aiming to contribute to creating more jobs for Emiratis and aid in transitioning to a knowledge- based economy that supports innovation and R&D.
Emirates Development Bank is providing banking support to small and medium-sized enterprises by launching a credit guarantee programme. The programme provides guarantees for the financing of corporate Bank loans of up to AED2 million for start-up companies with a guarantee of up to 85% of the loan amount, and guaranteed financing of up to AED5 million for existing companies, where the Bank guarantees 70% of the loan amount. Emirates Development Bank has continued to provide home finance to UAE nationals and the home finance portfolio exceeded AED1 billion at the end of August 2018, compared to AED425 million at the end of 2017, thanks to the Bank’s strategy of offering home finance for UAE nationals in line with the national agenda that reduces the financial burden on Emiratis. It takes into account credit flexibility through facilitating home finance for Emiratis to cover the cost of building and the amount of residential assistance issued by federal and local housing authorities, to enable national families to build their own homes, thus contributing to enhancing social stability, family security and their well-being in accordance with UAE Vision 2021.
Since the launch of Emirates Movable Collateral Registry Corporation (EMCR), a wholly-owned subsidiary of Emirates Development Bank, in April 2018, a total of 24,449 mortgages were registered. The electronic system of asset registry uses more than 113 banks and companies operating in the UAE and has 628 users. The launch of the company's operational business is expected to provide financing options for companies and projects, contribute to lower interest rates on loans, and provide the institutional framework and appropriate legislation for secured lending, thus contributing to increased state competitiveness and an improved business environment.
The Board of Directors has recently approved the establishment of a digital platform to enable the Bank’s transformation through digitization of all the Bank’s loans and internal procedures. This approach will allow the development of financing solutions and facilitates transactions that cater to customers’ needs. Emirates Development Bank is operating according to fast-paced technological advancement in the UAE, to maintain the highest levels of efficiency and professionalism of the Bank’s cadres.
Emirates Development Bank was established under Federal Law by Decree No. 07 of 2011 issued by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE. It became operational in June 2015 under the patronage of His Highness Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs. The Bank launched its second branch in Dubai to provide comprehensive and easily accessible banking services to more UAE nationals, an important strategic step within the overall vision of the Bank and in pursuit of its objectives to reach all customers throughout the United Arab Emirates.