Mohammad Bin Rashid Innovation Fund pledges support to seven projects in first quarter of 2018
Dubai: Up to Dh22 million will be allocated by the Mohammad Bin Rashid Innovation Fund (MBIF) to finance innovative companies in the first quarter of 2018, it was announced on Monday.
The Dh2 billion UAE Federal Government initiative, sponsored by the Ministry of Finance to support local innovators in accessing affordable finance through the provision of a government-backed guarantee, announced its support to seven projects that will each receive around Dh3 million disbursements in the next four months.
In a round-table interview on the sidelines of Finovate, Haytham Yousef Kamhiyah, CEO of Emirates Development Bank (EDB), the Funds operator and host, also revealed EDB’s plans to begin offering their own loans to finance innovation in a bid to encourage other banks to do the same.
“We have a good pipeline of about Dh22 million in new investments expected in the next quarter. We have looked at transactions in education, technology, energy and agriculture, service transportation and other sectors. To date, we have supported three projects who have received Dh15 million in funding,” he told reporters following the fund’s annual strategy meeting.
The fund, which seeks to finance innovation from all over the world as long as they set up operation in UAE, has reviewed several applications in the last period with a world-class advisory committee focusing on projects with a special innovation aspect in the seven major sectors of the UAE Innovation Strategy, he added.
“The proposition is open to anybody who has improved a concept and the cap for transactions can reach up to Dh10 million,” he explained. “Our aim is to attract the largest number of innovators to come and start operations in UAE.”
Kamhiyah pointed out one of the challenges being that banks may still “have a very low risk appetite” when it comes to lending small and medium enterprises even with a government-back guarantee. He pointed out that RAKBank has been one of the primary lenders keen to support innovative businesses.
“We want to push local banks to finance innovation. We are in the process to on-board nine financial institutions in 2018,” he said, adding that government guarantee interest rates range from 7-9 per cent, which are almost half of the normal commercial rates.
As part of the fund’s plans and strategy to boost and improve, they also announced introducing Sharia-compliant product, he said.
In 2017, MBRIF announced a Dh2 million investment in InternsME, a UAE based platform to connect interns with career opportunities.