(MENAFN- Khaleej Times) The National Bank of Abu Dhabi, or NBAD, the capital's biggest lender by assets, and the Khalifa Fund for Enterprise Development, or KFED, have agreed to set up a private equity fund to support small and medium enterprises, or SMEs.
The fund - called the Imtiyaz SME Development Fund - will have an initial equity size of Dh80 million with matching commitments from both KFED and NBAD.
The size of the fund is expected to reach Dh500 million.
It is a private equity fund aimed at encouraging Emirati entrepreneurship and providing equity financing to promising new or fast-growing existing SMEs.
NBAD group chief executive Michael Tomalin and KFED chief executive Abdullah Al Darmaki have signed a memorandum of understanding to jointly establish the fund. The fund expects strong support from major government-related entities, large corporations and institutional investors. The support would involve providing or enabling viable investment opportunities and/or contributing capital to the fund.
The KFED's Direct Investment Unit along with NBAD's Private Equity practice will look after the operation of the Imtiyaz Fund.
"Our partnership with NBAD to launch the Imtiyaz SME Development Fund will build on KFED's commitment towards promoting Emirati entrepreneurial activity, encouraging economic diversification and creating a favourable financing and investment environment for SMEs. We will develop the Imtiyaz Fund by building and expanding our public and private partnerships and the priority will be given to businesses that contribute to technology and knowledge transfer to the local market," Al Darmaki said.
"NBAD is an active supporter of SMEs in the country. This joint initiative with KFED reflects our continued commitment to further empower Emirati entrepreneurs and enable faster development of the SME sector in the UAE, a sector expected to become a key driver of innovation and economic growth," Tomalin said.
KFED launched its operations in 2007 to promote entrepreneurial activity and empower the nation's business talent. It trains potential entrepreneurs, provides soft loans and ongoing support during the set-up and operation of SMEs. NBAD has launched several SME-centric products since 2011. These include the opening of several business banking centres throughout the UAE, exclusively serving SMEs.
NBAD has also partnered with the KFED, the Abu Dhabi Chamber of Commerce and Industry, Dubai SME and the Ras Al Khaimah Free Trade Zone on various initiatives aimed at promoting the sector.
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