Jan 20 2014
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First four projects under Al Rafd Fund approved
Youth urged to seize new SME finance opportunities
The Public Authority for SME Development, Rafd Fund, and National Business Centre and SaaS Programmes, which serve as business incubators, have also developed a host of schemes to support start-up project owners. All these institutions acknowledge the fact that SMEs in the Sultanate have the potential to become engines of economic growth and that the Omani youth need to seize new opportunities. Recently, the Public Authority for SME Development sponsored 15 Omani youths to attend a condensed training course in England pertaining to Automobile Industry. Currently, the main SME finance schemes worth mentioning include the newly restructured Oman Development Bank (ODB) as well as the considerable attention being given to the Loan Guarantee Programme.
The 50 per cent government loan guarantee scheme, a joint programme with the Ministry of Commerce & Industry, ODB, Oman Arab Bank and Bank Muscat, has been especially designed to encourage the entrepreneurial spirit of young Omanis who have viable business ideas and are in need of the capital necessary to start their own enterprises or those who are wishing to expand their existing business. The loan guarantee programme provides a guarantee for 50 per cent of each SME loan, up to RO 250,000, with interest rates of only three per cent, while banks charge around six per cent interest on the remaining 50 per cent. All Omani SMEs with a project value of less than RO 500, 000 are eligible for the programme. According to experts the basis of SME financing is pretty much standard across the Omani banking industry, yet what puts Al Rafd Fund, established following the Royal Decree No 6/2013, in an advantageous position is the long-term support and dedication to develop the SME sector.
A comprehensive system for receiving applications for loans from the fund is being put in place. Al Rafd Fund recently announced new measures such as a dedicated Mobile Al Rafd Fund Centre and an Investment Plan to be implemented through Sanad centres. Al Rafd Fund also announced the launch of its website and the construction of a call centre. A contract will be signed with a specialised company to manage the centre. Applications can be made through the website. Importantly, the Mobile Al Rafd Fund will be equipped with cutting-edge digital tools and other facilities to provide full information and services for start-up finance. Tariq bin Sulaiman al Farsi, Chief Executive Officer, Al Rafd Fund, says branch offices of Al Rafd Fund will be opened soon in all governorates of the Sultanate. Moreover, new services will be added to Sanad centres to provide additional opportunities for the aspiring Omani entrepreneurs.
In Oman, the SMEs account for more than 90 per cent of the total businesses and their contribution to the GDP stands around 14 per cent. Presently, SMEs are the backbone of the private sector, providing the majority of jobs. It is worth recalling that in response to the Royal Directives of His Majesty Sultan Qaboos, the SMEs Development Symposium (January 19-21, 2013) was held at Saih Al Shamikhat in the Wilayat of Bahla aimed at instilling a culture of entrepreneurship in Omani youths, providing more job-oriented education, and addressing hindrances in the development of this sector. With all these new measures, it is hoped that SME financing will no longer be a hindrance as it was in the past. (with inputs from ONA)
© Oman Daily Observer 2014
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