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UAE launches state bank to finance housing and job creation

The United Arab Emirates UAE) has launched a state-owned bank to finance housing and other projects. 22 Jun 2015

The Emirates Development Bank (EDB) was created by the merger of Emirates Industrial Bank and Emirates Real Estate Bank.

With capital of 10 billion dirhams ($2.7 billion), the Abu Dhabi-based bank will allocate 5 billion dirhams ($1.85bn) to financing housing, industrial and other schemes for UAE nationals, it said. The bank was officially inaugurated this week, Trade Arabia said.

Deputy prime minister Sheikh Mansour said the EDB will boost the overall growth of the economy and help Emirati people to own their own homes. It will also support Emirati entrepreneurs and the SME (small and medium enterprise) sector, according to Trade Arabia.

EDB officials at the launch said that housing is an important focus area for the bank, helping Emiratis to own their first home either directly or in partnership with government housing programmes, Trade Arabia said.

The EDB plans to provide low-cost housing finance to around 30,000 UAE citizens by 2021 and will allocate 500 million dirhams to a credit guarantee scheme with other banks that will support local owners of small businesses, which the government hopes will create private sector jobs for citizens, Reuters said.

Amir Ahmad, a Dubai-based banking expert at Pinsent Masons, the law firm behind Out-Law.com, said: "This is a very positive development and will be a major step in providing access to funds for the SME sector in the UAE."