Industrial sector financing in the UAE has seen a significant rise, driven by government and private financing institutions that play a pivotal role in accelerating industrial growth and implementing the objectives of the “300 Billion Project”. Financing this sector is one of the key factors supporting the journey towards building a diversified, strong, and sustainable national economy characterized by innovation.
Industrial Sector Loans Rise to AED 94.85 Billion
Banks operating in the local market pumped AED 5.537 billion during the first nine months of 2024 as financing for the manufacturing sector, bringing the total loans for this sector to a historic high of over AED 94.85 billion, according to data from the Central Bank of the UAE.
The sector’s financing portfolio increased by 6.2% over nine months from its level of AED 89.315 billion at the end of 2023, with the portfolio’s growth over 10 years exceeding 37% compared to the end of 2015.
Role of Supporting Institutions in Boosting the Industrial Sector
Leading institutions such as the Emirates Development Bank, the Khalifa Fund for Enterprise Development, and the Mohammed bin Rashid Fund for SME Development stand out as key supporters of industrial projects, especially those focusing on innovation and technology. These institutions provide a range of flexible financing solutions and training programs that empower entrepreneurs and enhance the competitiveness of small and medium enterprises (SMEs).
Emirates Development Bank and Khalifa Fund: Comprehensive Support
The Emirates Development Bank follows a comprehensive approach to stimulate and develop local factories by offering a wide range of solutions and products for this sector, which is one of the five priority sectors financed by the bank. According to the bank’s vision, it aims to achieve the National Strategy for Industry and Advanced Technology by supporting and implementing the “300 Billion Project”, which will position the UAE as a leading global industrial hub by 2031.
The Khalifa Fund for Enterprise Development is one of the most prominent supporters of the industrial sector in the UAE, actively contributing to financing and developing small and medium industrial projects, with a focus on supporting local entrepreneurs and promoting industrial innovation.
Mohammed bin Rashid Fund: A Platform for Entrepreneurship
The Mohammed bin Rashid Fund for SME Development is a key platform for supporting entrepreneurship in the UAE. The fund provides flexible financing programs and specialized advisory services to enhance the competitiveness of projects, making it an integral part of the growing industrial landscape in the country.
Emphasis on the Banking Sector’s Role in Supporting Industry
Jamal Saleh, Director General of the UAE Banks Federation, emphasized the federation’s commitment to continuing its efforts to support the industrial sector to accelerate growth and economic diversification and achieve the objectives of the UAE’s industrial strategy, the “300 Billion Project”. He noted that the banking sector, under the supervision of the Central Bank of the UAE, plays a vital role in financing the industrial sector while ensuring the innovation of suitable solutions to keep pace with developments in the sector and the requirements of transitioning towards the Fourth Industrial Revolution and sustainability.
Industrial Sector: A Pillar of Economic Diversification
Saleh pointed out the importance of focusing on supporting the industrial sector as it represents a fundamental pillar in the economic diversification strategy. The sector contributed more than 11% of the UAE’s GDP in 2023 and offers vast growth opportunities within the frameworks established by the Ministry of Industry and Advanced Technology.
Expert Insights: Financing is Not a Barrier for Large Companies
Engineer Khaled Al Kaabi, Executive Director of “Eco Polymers” and “Eco Patch for Plastics”, confirmed that the UAE provides a fertile environment for supporting the industrial sector through innovative financing initiatives and programs that help empower startups, SMEs, and large companies alike. He noted that financing is not a barrier for large companies, as banks today seek to finance major industrial projects that represent opportunities for financial institutions.