QATAR: Local banks gear up to assist SMEs …in a big way

Local banks are gearing up to provide assistance to small and medium enterprises in a big way as the country looks to engage SMEs actively in nation-building and enhance private sector involvement in the economy.

Under Government’s directive, the state-owned Qatar Development Bank (QDB) has become the catalyst to SME development by designing a programme – Al Dhameen, which encourages banks to extend financial assistance to promising small and medium enterprises. Consequently, QDB signed agreements with all local banks making them partners of the Al Dhameen programme.

Local banks have since equipped their SME units with trained personnel so that the small and medium enterprises development programme achieves the desired national objectives.
Bankers who spoke to Gulf Times recently said SME development would be top on their priority along with infrastructure financing in the years ahead.
Ahlibank CEO Salah Jassim Murad said his bank planned to “refocus” its division that caters to the needs of the small and medium enterprises (SMEs) in the country.
“SMEs are a very important segment. Our government looks at small and medium enterprises as important tool in further developing national economy. We want to play a role in promoting our SMEs,” Murad said.
International Islamic (QIIB) said the development of the small and medium enterprises (SME) segment was a priority in the country.
The bank stressed its commitment to supporting and developing SMEs in the country.
“We take care of our small businesses; we will continue to assist them. We will also make optimum use of our opportunities, if they are good for the bank, particularly from the risk management perspective,” said CEO Abdulbasit A al-Shaibei.
The country’s largest Islamic lender QIB said it would also focus on extending support to small and medium enterprises in 2013 and beyond.
Al Dhameen guarantees banks’ risk-sharing in case the financed project fails partially or fully. It also encourages banks to finance small and medium enterprises that are promising but cannot provide the required collaterals or accounting documents that prove their eligibility to receive finance.
QDB said Al Dhameen reflects its commitment to assist start up and existing companies with lack of collateral to obtain access to funds for establishment or growth in their businesses.
All mainstream business activities are eligible for support under Al Dhameen except the following; agriculture, fishing and livestock, non-oil mining and quarrying, wholesale and retail trade, financial and insurance activities and real estate activities.
The programme does not provide direct finance to small and medium enterprises; rather it offers the business owner facilities to receive the required finance for their project from a partner bank, through issuance of guarantees in favour of the bank. Under this, the programme guarantees a major portion of the finance up to 85% of the finance value not exceeding QR15mn.
Any Qatari project – small and medium enterprises or joint ventures (including foreign investors) whose annual turnover does not exceed QR30mn can apply for finance from banks under the Al Dhameen programme.
Al Dhameen finance for existing companies offers guarantees of up to 75% of the unsecured outstanding principal and financing limits of up to QR15mn. Although QDB guarantees the loan to the partner bank, the sponsors are liable for the full loan amount.
Al Dhameen loans can be in the form of project financing for manufacturing units, where the maximum tenor for repayment will be eight years including a two-year grace period. Financing for services will have a maximum tenor of five years, including one year grace period.

Source: Caye Global News, Gulf Times

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