BMI Bank and Tamkeen expands Shariah compliant finance scheme in support of the local private sector

62 days to go Tuesday 15th July 2014 BMI Bank and Tamkeen expands Shariah compliant finance scheme in support of the local private sector Daily Cover BAHRAIN: BMI Bank, a subsidiary of Al Salam Bank-Bahrain, and government-owned enterprise development firm Tamkeen have announced an extension of the agreement between the organizations in providing Shariah compliant financing products for local SMEs and start-ups to fulfil their financial needs at a competitive cost. Under the new agreement, BMI Bank will make a fourth contribution of BHD10 million (US$26.28 million) to the total BHD302 million (US$796.35 million) in financing offered by Tamkeen to enterprises within the local private sector. As part of the arrangement, which Tamkeen runs through several leading banks in Bahrain including BMI Bank, Tamkeen will guarantee 50% of the total financing amount as well as subsidize 50% of the profit payments due from customers. Through this financing scheme, enterprises within the private sector are eligible to receive financing ranging from BHD10,000 (US$26,369.20) to BHD500,000 (US$1.31 million) to help design a higher growth trajectory for their companies. Additionally, the scheme affords a flexible repayment options up to 10 years with a grace period up to two years according to finance procedures. Mohammed Ali Bucheery, Tamkeen's vice-president for private sector support, said: “This will allow them (SMEs and entrepreneurs) to acquire flexible finance solutions. Corporate finance plays a key role in filling the finance gap faced by small and medium enterprises. In addition, this scheme urges corporations to finance their growth plans.” Echoing similar sentiments, Jamal Al-Hazeem, the director and CEO of BMI Bank, also pointed out that one of the significant characters of a flourishing and fast-growing economy is a thriving SME sector. The joint scheme was launched in November 2010, offering a suite of Shariah compliant financial products under the umbrella of the Islamic banking division within the bank aimed SMEs including startups, as part of Tamkeen's finance scheme offered by Tamkeen for the private sector. Since its launch, the finance scheme has enabled over 5,172 establishments to obtain the capital required for developing and promoting their activities, of which 1,553 are startups. As of May 2014, over 167 establishments have taken advantage of the special scheme between Tamkeen and BMI Bank. 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