Emirates Development Bank (EDB) could “potentially double” the size of its small- and medium-sized (SME) financing portfolio in 2019 and plans to raise funds through a benchmark-sized sukuk next year, its chief executive said. The government-owned bank, whose direct lending to Emirati-owned and managed businesses climbed to Dh407 million at the end of March this year, also plans to expand its partnership with major banks for its funding guarantee programme for smaller businesses, Faisal Al Bastaki, told <em>The National</em> in Abu Dhabi on Wednesday. EDB is “looking to significantly increase its SME lending portfolio and potentially double it by the end of this year” as the lender also continues to finance housing sector projects, Mr Al Bastaki said. “We have six partner banks, we are signing with more banks to encourage SME financing for UAE nationals … my plan is to have a minimum of 12 banks [both] local and international [financial institutions] in both Islamic and conventional [financing segments],” he said of EDB’s plans to expand its funding guarantee programme. EDB launched the Dh100m Credit Guarantee Scheme for SMEs in February. Through the programme, the bank covers up to 85 per cent of financing for start-ups, which could go as high as Dh2 million and up to 70 per cent for established SMEs with funding of as much as Dh5m, he noted. The SME sector is considered the backbone of the country's economy, accounting for more than 90 per cent of the businesses in the UAE, and the government is encouraging lenders, including EDB, to help meet the financing needs of smaller enterprises. Under its national economic agenda, the UAE aims to boost to 70 per cent the contribution of the SME sector to the country’s economy by 2021. EDB, whose mandate also includes home loans, has approved Dh1.45bn worth of housing finance for UAE nationals as of March 31, Mr Al Bastaki noted. The lender, which is partnering with banks as well as the Sheikh Zayed Housing Programme, is looking to increase the size of its home lending book as well. It has yet to participate in major infrastructure financing deals but Mr Al Bastaki said the “appetite” for such a transaction is there and the bank is awaiting a “green light” from the government. EDB, which issued its debut $750 million (Dh2.75 billion) bond, becoming the first federal entity to tap the international capital markets under the newly launched debt law, is looking to raise more funds early next year through a benchmark-sized sukuk deal under its $3bn Euro Medium Term Note (EMTN). Benchmark refers to a bond deal of at least $500m. “The first tranche was $750m and we are deploying it and as soon as we are finished we will go for the second tranche based on the bank’s [2020] strategy,” Mr Al Bastaki said, declining the give the size of the second tranche. Fitch Ratings earlier this week affirmed EDB’s Long-Term Issuer Default Rating 'AA-' with a stable outlook.