Hub71 collaborates with UAE banks to help SMEs


Published: Thu 25 Jun 2020, 5:36 PM

Last updated: Thu 25 Jun 2020, 7:41 PM

Hub71 has announced its collaborating with Mashreq Bank and First Abu Dhabi Bank to help identify and solve the pain points faced by startups.
The entities have also launched a whitepaper titled, 'Rethinking Banking for Startups', which explores the challenges that startups face when opening a UAE bank account. The whitepaper aims to foster collaboration with more UAE banks to pioneer new banking solutions designed specifically for tech startups. The findings outline how it may be possible to reduce the time taken for a startup to open a bank account in the UAE - from an average of 63 days - to less than five days.
The whitepaper highlights that 30 per cent of startups fail to open a bank account, forcing them to conduct their daily transactions via non-UAE based foreign banks which subjects startups to high international fees and presents lost opportunities for UAE banks. Furthermore, the results revealed that startups who had a more complex shareholding structure, such as those who were funded by a VC, took a longer time on average - up to 105 days - to set up a local bank account
Despite UAE's entrepreneurial drive, the delays experienced by startups were cited as due to stringent documentation processes and lengthy Know Your Customer (KYC) procedures that differ from bank to bank. These are key areas that Hub71 and partners aim to help solve for startups across the UAE.
Nader Museitif, head of Partnerships and Business Development at Hub71, said: "The UAE is experiencing significant digital transformation led by startups and setting up a UAE bank account is critical in order for startups to thrive."
Hub71, in collaboration with licensing entities and the local authorities, is working closely with banks and ecosystem partners to roll-out banking products catered for UAE early-stage startups who have little financial records and history. The solutions will ensure that UAE banks fully comply with KYC regulations. They will also allow startups to quickly access funds from pre-approved investors as well as access a suite of banking services for their day-to-day business.
Aref Al-Ramli, EVP of Global Head of Digital Ecosystems, Mashreq Bank, said: "Opening a bank account should be a hassle free and simple procedure for entrepreneurs and SMEs. Catering to this demand, we at Mashreq have radically transformed our KYC and account opening capabilities to offer individuals and businesses convenient and accessible platforms thus improving their digital onboarding journey. Mashreq's support to SMEs and new businesses is in line with the UAE's Vision 2021, in terms of making the country a leader in ease of doing business."
Vikas Thapar, head of Business Banking at FAB, said: "At FAB we are continuously working to support government initiatives to boost the local economy, and SMEs play a vital role in the UAE's GDP. That being said, we are constantly looking for ways to innovate our services and establish an environment for entrepreneurs and SMEs to not only exist, but to also thrive."

By Staff Report

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