Abu Dhabi has now introduced an interest-free, long-term financing facility that ranges from Dh150,000 to Dh3 million for licensed Emirati start-ups in the priority sectors.
This new series of funding programs by the Khalifa Fund for Enterprise Development provides start-up companies with up to 24 months of moratorium period and up to 84 months of payment period.
The new funding programs are divided into three categories, and are as follows:
Start-up funding program
This program consists of the ‘Microfinance Loan’ that can be used to finance micro start-ups with expenses of not more than 1 million Dirhams. This also extends up to 80 percent of the total business cost as long as the loan that is to be incurred does not go beyond Dh500,000.
The program also has the ‘Small Loan’, which funds not more than 80 percent of the overall cost for new trading, manufacturing and services SMEs with costs ranging from Dh1million to Dh5million.
The funding ceilings vary depending on the type of business; Dh2 million for manufacturing, and Dh1 million for the rest of the priority sectors as detailed in section 2.
Expansion loan
The expansion loan is intended for existing successful SMEs owned by people willing to develop and grow the business. It finances up to 80 percent of the total expansion cost but the loan is restricted to a maximum of Dh 3 million for manufacturing sector and Dh 2 million for other mentioned priority sectors only.
Agri-tech funding programme
This programme helps to apply the new technologies into agriculture if you require a loan of Dh150,000 to Dh400,000. This entails the Pack House and Infrastructure Development Fund (PHIDF) where contracted employer, this provides up to 90% of the costs for the construction and enhancement of pack houses and other structures.
Such costs also include pack house and packing material, storage and cooling structure, refrigerated vehicles, sanitary facilities and waste disposal. The fund will improve quality, safety and efficiency of horticultural products produced by the farmers and also allow the farmers to market them directly.
Abu Dhabi has also introduced a funding project which supports the new method of farming. Stakeholders describe this project as the ‘Net House Development Fund’ (NHDF) and it will provide funding up to 90% of the amount required for setting up / expansion of net houses.
Another funding programme is the Water Management System Enhancement Fund (WMSEF), it offer up to 90 per cent of the cost of sophisticated water management technologies such as reverse osmosis system, irrigation system, water recycling system among others with the view of applying efficiency in utilization of water.
“Our financing programs for licensed start-ups will be relaunched and re-imaged as value-specific funding solutions. Hence, these have been carefully crafted over time, based on rigorous studies to meet the Economic Vision 2030 of Abu Dhabi and to seize the prevailing market conditions and consumers’ preferences”.
The funding programmes are planned to offer the money that innovative entrepreneurs need to support and developing their businesses in the focus areas.
Because of the supporting function these sectors create GDP increase, they contribute to Abu Dhabi’s image as a profitable environment that supports SME development and innovation, added Alia Abdullah Al Mazrouei, Minister of State for Entrepreneurship, and CEO of Khalifa Fund.