Interview: Abdulaziz bin Nasser Al Khalifa
How does the merging of Enterprise Qatar with QDB impact the development strategy for the small and medium-sized enterprise (SME) sector?
ABDULAZIZ BIN NASSER AL KHALIFA: The merger means we can provide SMEs and entrepreneurs with a single window for services, and it increases the role of the bank as the primary advocate for SMEs and entrepreneurs. Direct and indirect funding for SMEs is critical and will remain strong, but our success post-merger will increasingly be measured by the continued growth of the private sector and the success of SMEs and entrepreneurs. SMEs account for 80% of the total number of companies in Qatar, so it is essential that we get this right.
This is also why we are placing even greater emphasis on innovative non-financial programmes like ISTESHARA (Advisory Services), which is QDB’s family of subsidised professional consultancy services for Qatari entrepreneurs and SMEs. Delivered by accredited service providers, there are four bank-subsidised services on the ISTESHARA platform: JADWA, OQOOD, TADQEEQ and EYADA (SMEs Clinic). Each empowers entrepreneurs to validate the commercial feasibility of business ideas, enhancing operational efficiency, competitiveness and profitability. QDB covers 70% of the consultancy cost, while the entrepreneur or SME covers 30%. Sound business fundamentals and strategic guidance in the early stages of a start-up or SME are the keys to long-term success and growth. As of March 2015, ISTESHARA has served 250 Qatari entrepreneurs and SMEs, providing services worth over QR12m ($3.3m). To date, 67 of the feasibility studies conducted through the programme have been referred to other QDB financial services programmes, completing the single-window cycle we are building to support SMEs.
How much support is being provided for start-ups, and which sectors are being targeted?
AL KHALIFA: We have seen continued growth in terms of funding. QDB disbursed QR1.11bn ($304m) in direct loans in 2014 – a 65% increase from the previous year. To date, QDB has granted QR3.15bn ($863m) in loans and advances to 272 customers. In terms of the broader SME ecosystem, we focus on areas where there are great business opportunities, and also on areas where development will have a positive economic and social impact for Qatar. With this in mind, we have historically focused direct lending on industrial manufacturing, agriculture, education and health care. This approach has been a feature of our direct lending programme.
When it comes to supporting entrepreneurs, however, we must not pick and choose sectors, because an entrepreneur’s job, in economic terms, is to spot a gap or opportunity and capitalise on it. We have set up special initiatives in the tourism sector, but ultimately it is also for the market to decide. This is why facilities like the Qatar Business Incubation Centre, a collaborative initiative between QDB and the Social Development Centre, are purpose-built to boost start-ups.
How do you evaluate the financial success of the Al Dhameen programme to date? Are there any other measures being taken to help SMEs?
AL KHALIFA: Al Dhameen has been successful both in performance and in changing the culture of SME lending in Qatar, unlocking capital for small businesses. We approved QR146.4m ($40.1m) in loan guarantees through Al Dhameen in 2014, securing access to lending for 62 SMEs who may not otherwise have received a loan due to credit or collateral constraints. Since 2011, QR553m ($152m) in loan guarantees have been approved for over 200 SMEs through Al Dhameen. In 2014 we also enhanced Al Dhameen’s product base in cooperation with our partner banks, and hosted a workshop for managers and credit officers at the banks to ensure SMEs seeking a loan get the best service.
In addition, we partnered with the Ministry of Economy and Commerce in the Al Furjan Markets project. Launched in May 2013, it transformed 44 plots of land in the Doha, Rayyan and Al Daayen municipalities into shopping areas and made the shops available to SMEs.
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