UAE launches supply chain finance program worth USD 1.6 bln

Monday 18 January 2021 13:05 CET | News

Abu Dhabi Department of Finance has launched a supply chain financing initiative worth USD 1.6 billion to increase liquidity for small and medium-sized enterprises (SMEs).

In Phase 1, the initiative will focus on firms in the healthcare sector to help them continue functioning during the COVID-19 pandemic and after. The financing plan comes as a partnership between the capital’s Department of Finance and the National Health Insurance (Daman) and First Abu Dhabi Bank (FAB).

The initiative is funded by Ghadan 21’s SME Credit Guarantee Scheme, which is a program created to support this kind of enterprises during the pandemic and will be extended to include other banks and sectors.

SMEs will be able to facilitate quick payment of their receivables through this plan, which means they will benefit from a cost cut on their working capital. Supporting small and medium-sized enterprises could help in moving to a knowledge-based economy, away from the one that is currently based on oil.

In 2019, SMEs accounted for 29% of the GDP and 44% of the non-oil economy of the UAE’s Capital. They made up around 98% of all companies in the Emirate, according to a report issued by Abu Dhabi Chamber in 2019.

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Keywords: Abu Dhabi, SCF, trade finance, SMEs, finances, COVID-19, First Abu Dhabi Bank, guarantee
Categories: Banking & Fintech
Countries: United Arab Emirates
This article is part of category

Banking & Fintech