Apr 24 2011
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Loan guarantee fund, business centre to aid Oman's start-ups
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.
He said, "There is very good co-operation between MoCI , Ministry of Finance (MoF) and some of the banks to create a loan-bank guarantee to protect against loan default. These are risky for banks and they have to make very high provisions on their books. So based on this, 50 per cent of the default will be guaranteed by MoCI , MoF and the Oman Development Bank loan-bank guarantee.
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.
© Muscat Daily 2011
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