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Sharjah initiates Dhs4 billion liquidity support to counter impact of virus

A breathtaking view of the Sharjah Corniche. The authorities in Sharjah and across the region are taking the required measures to provide maximum assistance to all businesses.

The Sharjah Finance Department, SFD, recently established a framework worth Dhs4 billion to enhance liquidity for the banking system in the emirate. The move aims to provide additional financial assistance to all businesses impacted by the outbreak of COVID-19.

“Issued as 12 month dirham-denominated paper in several tranches, the Sharjah Liquidity Support Mechanism, SLSM, Sukuk represents the first rated short term local currency tradeable instrument in the UAE, which can be used for liquidity management by banks,” SDF said in a statement on Tuesday.

“This paper has a short term investment grade rating of A-2 by Standard & Poor’s rating agency,” it added.

Waleed Al Sayegh, Director-General of Sharjah Finance Department said, “The authorities in Sharjah and across the region are taking the required measures to provide maximum assistance to all businesses dealing with the impact of the outbreak. This service will allow banks to use the Sukuk as security to access liquidity facilities at the UAE Central Bank, by following the required guidelines.”

Meanwhile, the Abu Dhabi Exports Office, ADEX, and the Sharjah Chamber of Commerce and Industry, SCCI, are partnering together on a strategic initiative to help boost exports from one of the leading manufacturing hubs in the region that provides a significant contribution to the UAE’s GDP. ADEX, the UAE-wide export financing entity founded by Abu Dhabi Fund for Development, ADFD, and SCCI, represented by the Sharjah Exports Development Centre, SEDC, signed a memorandum of understanding on Tuesday to support marketing and promotion of Sharjah as a strategic international trade partner. The partnerships also seeks to empower SCCI members to explore new international export markets and business growth opportunities by tapping into the unique suite of financial products and services provided by ADEX.

The signing ceremony was held in the presence of Abdullah Sultan Al Owais, SCCI Chairman, Mohammed Saif Al Suwaidi, ADFD Director-General, and Abdul Aziz Shattaf, SCCI Assistant Director-General, Members Services Sector and SEDC Director. The MoU was signed by Mohammad Ahmed Amin Al-Awadi, SCCI Director-General, and Saeed Al Dhaheri, ADEX Acting Director-General.

With the support of ADEX, Sharjah manufacturing and business leaders can access new sources of funding to directly finance transactions with overseas buyers and increase export business as the UAE and international markets continue to open up after the lockdowns end.

As one of the first joint activities, ADEX and SCCI are preparing to host a special online education workshop for all export companies in Sharjah.

The workshop will help SCCI companies better understand how to access Dhs550 million ($150 million) in ADEX funding allocated to directly support national exports in non-crude oil sectors in order to expand their export business.

Welcoming the signing, Abdullah Al Owais said, “This partnership is part of SCCI’s effort to cooperate with government entities like ADEX that can support our national companies with innovative new models that better enable them to develop their businesses and diversify their export markets, thus contributing to the economic performance of the Emirate of Sharjah and its business community.”

“Working with ADEX,” he continued, “we will promote the advantages of investing in the UAE and in Sharjah by highlighting the emirate’s attractive environment and the innovative facilities and services provided by SCCI and our UAE government partners.”

For his part, Mohammed Al Suwaidi said, “Sharjah has long served as a strategically important economic centre in the UAE and a major contributor to the national export economy.”

“Through our partnership with SCCI, ADEX can play a key role in the short-term supporting Sharjah companies in their recovery from the current economic challenges. But more importantly, this is a long-term partnership to help continue to expand the Sharjah economy and contribute to our national economic diversification strategy,” he explained. ADEX provides direct financing and credit guarantees to overseas buyers from the public and private sectors seeking to import goods and services from UAE companies. Financing is provided in the form of direct loans to overseas buyers from UAE companies as well as payment guarantees to financial institutions for loans offered to their buyers for procurement of goods and services from UAE companies.

Funding export transactions through ADEX enables companies to safely and securely enter new international markets. While the loans are made to the overseas buyer, upon successful delivery of goods or services ADEX makes payment direct to the UAE exporter, eliminating payment delays and risk of non-payment. ADEX funding and guarantees are available to national businesses across the UAE in all non-crude oil sectors.

ADEX and SCCI are working on developing a mechanism that will drive the planning and implementation of joint export market development projects. The mechanism will provide easy access for Sharjah business community to approach ADEX and avail their services, enhancing the emirate’s commercial enterprises’ competitiveness, and bolstering its position as an export destination to regional markets.

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