New Khalifa Fund initiative to provide up to $545,000 for Emirati entrepreneurs

The Khalifa Fund for Enterprise Development has unveiled a new programme that will provide up to Dh2 million ($545,000) in funding to support Emirati entrepreneurs as part of efforts to promote long-term economic stability and job creation in Abu Dhabi, its chief executive said.

The medium-term and interest-free loans for small and medium enterprises were “carefully” determined to meet the diverse financial needs of entrepreneurs across different industries that play key roles in the UAE capital’s growth, Alia Al Mazrouei told The National.

The programme is the fund’s first major initiative in the post-Covid era, during which it conducted a “thorough examination of the market, including feedback from entrepreneurs and an analysis of emerging trends”, she said.

“It allowed us to identify areas where entrepreneurs often faced challenges, such as working capital, asset acquisition and access to financing for technological advancements.”

The new funding tools cover business operating capital, which will help entrepreneurs with essential financial resources to cover day-to-day operations such as salaries, inventory, overheads and other short-term financial obligations, excluding rent.

They will also support financing for fixed assets including vehicles and logistics, and equipment and machinery, with up to 80 per cent funding offered for new assets.

The industries that will be covered by the programme include health care, education, agriculture, information communications technology, tourism and manufacturing.

“The growth of the agricultural sector and the adoption of modern technologies within it contribute to achieving sustainable development goals, particularly in terms of food security. Meanwhile, the information technology, communication, industry and tourism sectors attract foreign investments,” Ms Al Mazrouei said.

The programme will, for the time being, be available to businesses headquartered in Abu Dhabi, she said, and can be accessed through the Abu Dhabi government’s services platform Tamm.

“The Abu Dhabi government often sets specific economic and development priorities, which we are aligned with by focusing our efforts on areas that are of strategic importance to the government,” she said.

“By concentrating efforts in Abu Dhabi, the Khalifa Fund can efficiently build a supportive entrepreneurial ecosystem with the necessary infrastructure, mentorship and networking opportunities.”

Sectors will have varying funding eligibilities. Financing for agricultural technology has the highest allocated maximum amount of Dh2 million, she said.

Fixed assets, along with financing for invoices, advance payment guarantees and e-commerce, can receive up to Dh1 million while business operating capital has a maximum funding of Dh600,000, she said.

“Our primary goal is to provide funding to Emirati businesses in Abu Dhabi that meet the specified criteria … these amounts are designed to strike a balance between providing substantial financial support while ensuring responsible allocation of resources,” Ms Al Mazrouei said.

The fund also does not have a specific target for the number of companies it plans to support, but it will “diligently evaluate the funding applications to identify and support businesses that show significant potential for success”, she said.

SMEs and start-ups play a key role in a digital economy and are vital to the Emirates’ goal of becoming the top nation globally for entrepreneurship. Latest government data shows SMEs represent more than 94 per cent of all companies operating in the country.

The number of SMEs in the UAE hit about 557,000 at the end of 2022, state-owned news agency Wam previously reported.

The UAE aims to increase this number to one million by the end of 2030, Wam cited Abdullah bin Touq, Minister of Economy, as saying.

A worker picks berries at the Al Foah farm in Al Ain. The Khalifa Fund for Enterprise Development’s new funding initiative will allocate up to $545,000 for the agricultural technology sector. Khushnum Bhandari / The National

The UAE and Abu Dhabi have rolled out several initiatives to support these companies.

Earlier this month, the Ministry of Industry and Advanced Technology, along with its partners, launched new incentives packages to boost industrial SMEs.

“By investing in these vital sectors, we pave the way for local businesses to thrive, ultimately leading to a more vibrant and diverse economic landscape,” Ms Al Mazrouei said.

The Khalifa Fund was established in 2007 in Abu Dhabi and has been running several highly targeted financing and training initiatives.

Initially covering Abu Dhabi, Al Ain and the Western Region, the fund in 2011 expanded its scope to the Northern Emirates, providing services to businesses in Ajman, Ras Al Khaimah and Fujairah.

Updated: November 07, 2023, 5:58 AM

Source link