How Will Interest-Free Loans Boost UAE's Priority Sectors?
The Khalifa Fund for Enterprise Development has launched a new suite of funding programs targeting licensed Emirati start-ups in priority sectors. They are offering interest-free, long-term loans ranging from AED 150,000 to AED 3 million, with flexible repayment periods of up to 84 months and a grace period of up to 24 months. These programs are designed to enhance the capabilities of start-ups, ensuring their successful establishment across various sectors and helping them compete effectively in the market.
The aim is to foster a culture of innovation and entrepreneurship among UAE Nationals, further enhancing the growth and development of the SME ecosystem across sectors like healthcare, education, agriculture, tourism, ICT, manufacturing, and other innovative projects. The funding suite includes six products under three main programs: Startup Funding, Expansion Funding, and Agri-tech Funding.
The Startup Funding program includes the Microfinance Loan, which supports micro start-ups with costs not exceeding AED 1 million. This loan can cover up to 80 percent of the total business cost, provided it doesn’t exceed AED 500,000. It also includes the Small Loan, which finances up to 80 percent of the total cost for new small and medium businesses in different sectors, with costs ranging from AED 1 million to AED 5 million. The funding cap is AED 2 million for manufacturing sector businesses and AED 1 million for businesses in other priority sectors.
The Expansion Funding program offers the Expansion Loan, which supports existing successful SMEs looking to develop and expand. This loan can cover up to 80 percent of total expansion costs, with a cap of AED 3 million for manufacturing sector businesses and AED 2 million for businesses in other priority sectors.
The Agri-Tech Funding program is focused on enhancing the agricultural sector by supporting the adoption of modern agricultural technologies. The loan amounts range from AED 150,000 to AED 400,000 and include three main products. The Pack House and Infrastructure Development Fund covers up to 90 percent of costs for building and improving pack houses and related facilities, such as storage, cooling facilities, and sanitation. The Net House Development Fund finances up to 90 percent of costs for establishing or expanding net houses. Lastly, the Water Management System Enhancement Fund covers up to 90 percent of costs for advanced water management technologies, like reverse osmosis systems and irrigation upgrades.
Her Excellency Alia Abdullah Al Mazrouei, Minister of State for Entrepreneurship and CEO of Khalifa Fund, explained that these re-envisioned financing programs are tailored to align with Abu Dhabi's Economic Vision 2030 and adapt to evolving market demands. They aim to provide innovative entrepreneurs with the financial resources needed to boost their business potential within key sectors. These sectors are vital for bolstering the GDP and reinforcing Abu Dhabi's status as a nurturing incubator for SMEs and an innovation hub.
Alia Al Mazrouei emphasised that the initiative reaffirms their commitment to fostering a culture of innovative entrepreneurship within the Emirati community. By offering both financial and non-financial support, they aim to cater to Emirati SMEs of all sizes and development stages. The goal is to empower the aspirations of Emirati entrepreneurs with promising ventures, contributing to the advancement of Abu Dhabi’s SME ecosystem and supporting a diverse, innovative, and sustainable economy.
