The government of Abu Dhabi signed an agreement with First Abu Dhabi Bank (FAB) to extend state-backed loans to SMEs to open up more avenues of financing for the cash-strapped sector. FAB will extend loans to SMEs that will carry government guarantees in case of a default of up to 75% of the loan amount, Saif Al Hajeri, chairman of Abu Dhabi's Department of Economic Development, said on Tuesday. Under the terms of the agreement signed between the Abu Dhabi Investment Office and FAB, the lender will be the sole operator of the AED9bn set aside for SMEs under the government's Ghadan 21 economic stimulus package, according to Salil Ahuja head of products portfolio and value propositions at FAB's business banking. The option to apply for government-backed funds will be open to both Emirati and expatriate-owned businesses in the emirate, with revenues as low as AED15mn and up to AED250mn.