The Ministry of Commerce and Industry has announced that a new business centre and loan guarantee fund will both be available by June to aid new start-up companies.
Expected to be ready by early June, the 4,000sq m business centre will be set up in Knowledge Oasis Muscat's new KOM 4 building and will include business incubators, electronic and physical libraries, structured training courses and evaluation initiatives for both entrepreneurs and their ideas.
The loan guarantee fund, which will guarantee the default of a loan, will help start-ups secure funding from banks, which are traditionally reluctant to lend to new small and medium enterprises (SMEs) because of the risk.
As it begins a one-year trial period with BankMuscat and Oman Arab Bank late next month, Salah al Maawali, director general of SME development at the Ministry of Commerce and Industry (MoCI) told reporters that the new fund will guarantee half of the loan's default.
"The good thing about this guarantee is that it is a self-sustainable programme. The owner has to pay three per cent to the guarantee fund, because if there is a default we will get the money from that."
Speaking at an SME seminar organised by the Public Establishment for Industrial Estates (PEIE), Maawali added that fund expects to hand out no more than 50 loans during its initial trial year, but hopes to roll the initiative out to leasing and finance companies as well as other banks if the trial is successful.
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