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VAT’s UP
Emirates NBD launches VAT-based loan solution for SMEs
Dubai’s largest bank Emirates NBD has launched a new VAT-based loan solution for small and medium-sized enterprise (SME) customers.
The new programme eases the lending application process for SMEs as it allows them to validate their business turnover and income by providing the bank with copies of their VAT returns filed with the UAE’s Federal Tax Authority (FTA).
“Emirates NBD’s VAT-based loan offering symbolises our commitment to the UAE’s small and medium businesses and supports the objective of Expo 2020 Dubai to foster growth of the SME sector,” said Suvo Sarkar, senior executive vice president, Head of Retail Banking and Wealth Management at Emirates NBD.
The new programme will cover home, auto and business loan products.
Bank lending remains one of the biggest challenges faced by GCC-based SMEs, where less than 5% of bank loans are dedicated to small businesses in the region. It is believed to be among the lowest in the world.
Institutions such as Mashreq Bank argued that its SME loss rate stood too high at 20%, CEO Abdulaziz Al Ghurari said at the 2017 Middle East Banking Forum in Abu Dhabi, though it is not clear whether other banks face the same rates.