Emirates Development Bank allocates AED30m to finance SMEs through ‘Beehive’

ABU DHABI, Emirates Development Bank (EDB) today announced that it has signed an agreement with Beehive, the UAE’s first Peer-to-Peer (P2P) platform, to expand funding options for the Small and Medium-sized Enterprises (SMEs).

The announcement follows EDB’s strategic pledge to support SMEs, startups and large corporates across five priority sectors including manufacturing, healthcare, infrastructure, food security and technology over the next five years.

As an institutional investor, EDB has initially assigned AED30 million funding via the Beehive platform to qualifying businesses. Beehive, in turn, will facilitate business loans to creditworthy SMEs looking to expand operations or improve working capital.

The funds disbursed through this partnership have the potential to support hundreds of SMEs in the region, reinforcing the bank’s new strategy to increase financial accessibility to Emirati and UAE resident-owned SMEs and businesses.

The EDB strategy aims to help SMEs to access finance and grow their business, which should boost their contribution to UAE’s non-oil GDP to over 70 per cent by 2021, besides enhancing in-country value, productivity and employment.

Commenting on the partnership, Ahmed Mohamed Al Naqbi, CEO of EDB, said, “The collaboration with Beehive is part of our mission to bridge the funding gap by offering SMEs greater and easier access to financial sources. Through our combined efforts, we look forward to strengthening the SME ecosystem and supporting the UAE’s goals to build a robust knowledge-based economy.”

For his part, Craig Moore, Founder and CEO of Beehive, said, “The addition of institutional investors to Beehive will give SMEs more secure financing and better liquidity on the platform, which means that funding can be received faster too.”

The Beehive platform uses crowdfunding technology to connect SMEs looking for finance with a crowd of investors who can support their finance request, whilst earning attractive returns. In addition to its network of retail investors, Beehive has adapted its business model to include institutional investors to increase liquidity and the speed of funding for its businesses.

Source: Emirates News Agency

UAE interbank rates up replicating US Fed’s move

ABU DHABI, The interest rates charged by the Emirates Inter-Bank Offered Rate (EIBOR) jumped across all terms post the Central Bank of the UAE increased on Thursday its base rate applicable to the overnight deposit facility (ODF) by 5 basis points to 15 bps, replicating the US Federal Reserve’s move on Wednesday, according to the CBUAE’s figures.

The one-year deposit facility booked a significant rise to 0.748 bps on June 17 from 0.565 bps on June 16.

The six-month deposit facility likewise grew to 0.643 from 0.489 bps during the reference period, with the one-week deposits going up from 0.10 to 0.118 and ODF from 0.11 bps to 0.117.

The UAE Dirham is pegged to the US Dollar and therefore the interest hike is attributed to the US Federal Reserve’s decision to increase the Interest on Excess Reserves by 5 bps.

The base rate is the interest rate a central bank charges its domestic commercial lenders to borrow money.

Source: Emirates News Agency

CBUAE raises base rate by 5 basis points

ABU DHABI, The Central Bank of the UAE (CBUAE) has decided to raise the Base Rate applicable to the Overnight Deposit Facility (ODF) by 5 basis points, effective from Thursday, 17th June 2021.

This decision was taken following the US Federal Reserve Board’s yesterday’s announcement to increase the Interest on Excess Reserves (IOER) by 5 basis points. The new Base Rate set by the CBUAE is 15 basis points.

The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate.

The Base Rate, which is anchored to the US Federal Reserve’s IOER, signals the general stance of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates.

Source: Emirates News Agency

UAE GDP is projected to grow by 2.4% in 2021, 3.8% in 2022 and non-oil GDP to expand by around 4% in both years

ABU DHABI, The UAE GDP is expected to grow by 2.4 percent in 2021 and 3.8 percent in 2022 while the non-oil GDP to expand by around 4 percent in both years, according to the Financial Stability Report (FSR) released by the Central Bank of the UAE (CBUAE) today.

The CBUAE has published its FSR for the year 2020, featuring key solvency and liquidity indicators that demonstrate the resiliency of the UAE’s financial system amid the COVID-19 pandemic.

The report gives a comprehensive overview of the development of the UAE economy and financial system in 2020. CBUAE projects that the UAE economy is expected to gradually recover during 2021 and 2022 from the repercussions of the COVID-19 pandemic. As per CBUAE’s findings, the Targeted Economic Support Scheme has been effective in mitigating the risks posed by the pandemic by ensuring a continued flow of credit and helping affected individuals and companies by the repercussion of COVID-19 to overcome temporary debt repayment difficulties.

During 2020, the CBUAE closely monitored the developments in the banking sector, especially asset quality and the growth of lending. CBUAE’s Financial Stability Report demonstrates that the UAE banking sector remains resilient, with sustained lending capacity. The effects of the pandemic resulted in banks’ higher impairment charges, lower operating income and reduced profitability. The aggregate capital and liquidity buffers remain well above the regulatory requirements.

In addition, CBUAE conducted frequent top-down solvency and liquidity stress tests by using a number of hypothetical adverse scenarios at different stages of the COVID-19 crisis. The stress testing results indicated that the UAE banking system has solid capital and liquidity buffers to withstand the significant hypothetical shocks. A separate section of the report is devoted to climate risk, which is at the forefront of regulatory focus both globally and in the UAE. The Financial Stability Report underlines that it is important for the UAE banks to consider integrating climate change risk into their lending and operational processes.

Detailed information about payment systems operated by the CBUAE is also featured in the report, as well as the benefits and risks posed by new technologies and cyber-security. The report highlights the importance of adequate management of risks associated with new technologies and increased competition from innovative market entrants. Continued focus on those risks is important as the UAE strengthens its role as the largest FinTech hub in the Middle East.

The Financial Stability Report also covers the other key sectors of the UAE financial market, such as the insurance sector, finance companies, exchange houses and capital markets.

Commenting on the findings of the report, Khaled Mohamed Balama, Governor of the Central Bank of the UAE, said: “In line with the UAE’s robust mitigation measures, including a swift rollout of COVID-19 vaccines, CBUAE has worked tirelessly to ensure that vital sectors of the nation’s economy are able to withstand this crisis.”

”CBUAE’s introduction of the Targeted Economic Support Scheme came at the right time, ensuring that banks could mitigate funding and liquidity pressures and maintain their lending capacity, resulting in the provision of necessary aid to individuals and corporates alike. Our support is ongoing as most support measures provided by CBUAE will remain in place through 2021. Together with the UAE financial sector, we pave the way for gradual economic recovery and remain vigilant towards the challenges ahead, as we continue to uphold the UAE’s financial and monetary stability,” he added.

Source: Emirates News Agency

Emirates Steel’s headquarter receives LEED Platinum Rating

ABU DHABI, Emirates Steel’s headquarter and warehouse in Musaffah Industrial Area in Abu Dhabi has received the Platinum Rating for green buildings from Leadership in Energy and Environmental Design (LEED v4) awarded by the US Green Building Council (USGBC), achieving 80 and 82 points respectively.

“Emirates Steel is committed to the highest standards of sustainability and efficiency in all projects and initiatives. Receiving the Platinum Rating for green buildings from LEED highlights our sustainability efforts and leadership. This supports the national plans and strategies promoting natural resources’ sustainability, energy and water conservation, and adopting green practices in every facet of our lives,” said Saeed Ghumran Al Remeithi, CEO of Emirates Steel.

“Our existing headquarter and warehouse building have been upgraded to fulfill the green buildings’ standards. This helped us rationalise our energy consumption, improve buildings’ indoor environment quality, enhance its thermal insulation, find new sustainable solutions for waste management, and other LEED requirements. This helps us maximise our contribution in reducing emissions, promoting sustainability and protecting our environment,” added Al Remeithi.

In October 2020, Emirates Steel became the first steel manufacturer in the region and one of the first 50 companies in the world to be verified for LEED documentation for its products. Its high-quality steel products comply with international and local Green Building rating systems, such as (LEED) and Abu Dhabi ESTIDAMA programme.

Source: Emirates News Agency