go back

Bank Muscat launches unique non-collateral SME financing programme

MUSCAT, 20 November 2013 – Bank Muscat, the flagship financial services provider in the Sultanate, on Wednesday (20 November 2013) launched a unique SME financing programme which addresses a long-felt requirement of entrepreneurs in Oman. The new facility broadens financial access and helps entrepreneurs overcome challenges arising from non-availability of collaterals for SME finance.

Tariq bin Suleiman Al Farsi, CEO of Al Rafd Fund & Board Member of the Public Authority for Small & Medium Enterprises, presided as guest of honour at the launch ceremony of al Wathbah SME Non-Collateral Programme, in the presence of AbdulRazak Ali Issa, Chief Executive.

Tariq bin Suleiman Al Farsi congratulated the bank for the initiative and said: “The launch of al Wathbah SME Non-Collateral Programme opens a new world of opportunity for entrepreneurs. The financing programme not requiring collaterals is a bold step affirming the bank's commitment to encourage an entrepreneurial culture in Oman."

AbdulRazak Ali Issa said: “Bank Muscat initiatives aimed at supporting entrepreneurs and developing the SME sector stem from the Royal directives which have emphasized on the need for sustained efforts to promote its role in the development of the national economy. Bank Muscat takes pride in adopting tangible steps aimed at implementing the Royal directives on SME development benefiting the country's youth." 

al Wathbah non-collateral programme is designed to offer innovative banking solutions in the form of financing for business activities such as purchase of equipment, supply of raw materials or provision of working capital and other types of financial requirements required by entrepreneurs.

Ilham al Hamaid, AGM – SME Credit and Marketing, said: “The launch of al Wathbah SME Non-Collateral Programme follows a detailed study of the requirements of entrepreneurs. The aim of the programme is to complement the government's efforts in the development of this vital sector, and we earnestly hope that this unique programme will help simplify the procedures related to SME finance. The new facility will be especially helpful to SMEs who do not have a long credit history and suffer from an absence of requisite collateral."

The innovative programme covers contract and supply finance as well as asset finance. Businesses registered under the Ministry of Commerce and Industry as per the Omani law with annual turnover below RO 2 million and managed by Omani nationals or expatriates are eligible to apply for non-collateral finance.

For contract and supply finance, an SME could receive credit facilities from the bank either under Purchase Order finance (POF) or Receivable finance (RF).

Asset finance is aimed at providing part-finance cost of capital equipment, including passenger cars, transport vehicles, construction equipment, cranes, dredgers, dumpers, generator sets etc. and machinery used for business purposes.

For non-collateral finance, the bank would evaluate risk assessment and due diligence of the company/government entity awarding contracts to SMEs.

Over the years, Bank Muscat has taken several strategic steps to strengthen the SME sector in Oman. al Wathbah, Bank Muscat's small and medium enterprise (SME) department, has been very dynamic in financing businesses and strengthening the SME foundation in Oman. Serving as building blocks for existing and prospective entrepreneurs, these initiatives assume importance in the backdrop of the priority accorded by the government to develop the SME sector in Oman.