Emirates Islamic Bank is set to offer financing direct to start-up businesses.
Emirates Islamic Bank targets small businesses
Emirates Islamic Bank is set to offer financing to small start-up companies.
The bank, a subsidiary of Emriates NBD, is in the process of hiring business analysts and relationship managers to focus solely on lending to start-up entrepreneurs and small-to-medium sized enterprises (SME). It expects to role out a number of products in the next quarter, including asset-based loans and working capital finance.
Faisal Aqil, head of retail banking at EIB, claimed the bank was the first in the country to offer direct loans to all nationalities of entrepreneur on a start-up basis.
"We have the expertise, we are building a team and we will look to lend to the sector in the next three months," Mr Aqil said.
"We are looking for entrepreneurs with a tight business plan and a strong idea," he said.
Lending to SMEs is becoming an increasingly important area of growth for banks as the economic recovery takes hold.
Emirates NBD and EIB are already involved in financing Emirati entrepreneurs through the Al Tomooh scheme, run by the Mohammed Bin Rashid al Maktoum foundation. As part of the scheme, Emirati nationals receive financing at zero interest.
"This scheme is part of our corporate social responsibility activities and our commitment to the community," Mr Aqil said. "But we now want to look at start-ups from a directly commercial perspective."
The bank will offer financing to start-up entrepreneurs of all nationalities.
EIB currently offers finance to SMEs that have a two-year trading and financial track record. SME lending makes up 15 per cent of the bank's total loan portfolio and it now wants to expand this level aggressively.
"SME lending is one of the more profitable areas of our loan book," Mr Aqil said.