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OMAN: Bank Muscat’s
Islamic banking window, Meethaq, has signed an MoU with Zubair Small
Enterprises Center (Zubair SEC), under which both parties will
collaborate to lend support to entrepreneurs and small business owners
while maximizing successful entrepreneurial platforms in the sultanate.
This partnership is indeed timely, as SME sectors in many Islamic markets
are faced with funding pressures due to the lack of Shariah compliant
financial products.
Compared to its regional peers, Oman is reportedly home to one of the
least developed SME sectors with such enterprises making up around 16% of
the country’s GDP according to industry figures. In Egypt SMEs contribute
up to 80% of GDP; in Lebanon 99% and Pakistan, Morocco and Tunisia at
between 30-50%, reported the International Finance Corporation (IFC). IFC
in its latest SME study (see IFN Report Vol.11 Issue 27) noted that only
36% of the 160 banks surveyed offered SME-focused products, while only
31% had a Shariah compliant SME option. Recognizing this disparity, the
Omani sultanate has assumed a more proactive stance towards developing
the SME segment; while banks have taken notice of this unfulfilled
segment of immense potential, including Bank Muscat which recently
launched a training academy specifically for entrepreneurs to aid the development
of the nation’s SME sector.
“The main objective of the bank's SME strategy is to complement
government efforts in empowering entrepreneurs to chart successful
business ventures by providing necessary training, guidelines, tools
etc,” explained Sulaiman Al Harthy, Bank Muscat’s Islamic banking group
general manager. “The partnership with Zubair SEC marks a clear
progression of the well-defined strategy pursued by the bank in line with
the directives of Sultan Qaboos bin Said to support the SME sector and
strengthen its role in the economic development of Oman."
Elaborating further on the collaboration Mohammed Al Hasani, the chief
communications officer of Zubair Corporation, said: “This facility has
been evolving and developing based on the close attentiveness to the
needs of Zubair SEC's members and the market demand. What we always aim
for is to cater to entrepreneurs' needs with all our capacity and reach.
Hence, the partnership with Meethaq Islamic Bank has been very
well-received by our members and brings a new perspective to the
‘access-to finance’ that we try to facilitate for them through our
network of strategic partners."
Through the MoU financial assistance will be extended to local micro and
small enterprises based on the funding criteria set by Meethaq; members
of Zubair SEC’s Direct Support Program will also be included in the pool
of potential financing receivers. In addition to their SME initiative,
Meethaq and Zubair SEC will also join efforts in raising awareness on
Islamic finance, entrepreneurship and business administration.
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