Dubai has announced an initiative to provide interest-free loans to support small businesses affected by the recent adverse weather after the UAE this month witnessed its worst rains since records began.
Mohammed Bin Rashid Establishment for Small and Medium Enterprises Development, known as Dubai SME, will also offer grace and postponement periods for existing loans taken by Emiratis who own small and medium-sized enterprises, the entity said on Saturday.
The special incentive for Dubai SME members allows eligible companies to obtain interest-free loans of a maximum of Dh300,000 ($81,688) with a grace period of six to 12 months, to repair or replace damaged properties.
“We are collaborating with our partners to explore ways of mitigating the effects of the recent weather conditions that have impacted the country, facilitating a swift recovery,” said Abdul Al Janahi, chief executive of Dubai SME, a subsidiary of Dubai's Department of Economy and Tourism.
The move will contribute to “alleviating the financial burden and covering the costs of repair and replacement operations to resume business as quickly as possible and reduce the period of disruption to regular operations, as well as supporting the local economy, considering the significant role SMEs play in revitalising and developing Dubai’s economy”, Dubai SME said.
Affected Dubai SME members can provide the required documents to the Mohammed Bin Rashid Fund for SMEs' designated relief financing committee.
The major storms in the UAE led to flooding in several areas, damaged properties and disrupted daily activities. There has been a co-ordinated response from various departments across the UAE to support recovery.
The UAE Central Bank last week issued a notice to all banks and finance companies to allow a six-month repayment deferment for personal and car loans for customers affected by the storms.
The “deferral shall be without imposing additional fees, interest or profit” charges, or otherwise increase the principal amount of the loan”, the regulator said.
The Central Bank also confirmed that damage to vehicles and homes due to the record-breaking storms last week would be covered if there is a comprehensive insurance policy against loss and damage.
