Interview: Abdulaziz bin Nasser Al Khalifa
How much funding did QDB award through direct and indirect lending programmes in 2015?
ABDULAZIZ BIN NASSER AL KHALIFA: We have seen continued growth in terms of funding. QDB disbursed QR1.01bn ($277.1m) in direct loans in 2015, which is a 34% increase on the previous year. In terms of indirect loans, we disbursed QR292m ($80.1m) in 2015, which is a 99% increase on 2014. Since 1998, QDB has granted a total of QR4.85bn ($1.3bn) in loans and advances to over 385 customers. In terms of the broader ecosystem for small and medium-sized enterprises (SMEs), we focus on areas where there are business opportunities, and also on areas where development will have a positive socio-economic impact. To this end, we have historically focused direct lending on industrial manufacturing, agriculture, education and health care.
What is the economic importance of SMEs, and how does QDB ease their access to finance?
AL KHALIFA: Qatar has long recognised the importance of SMEs to the national economy. According to our research, SMEs are responsible for about 10% of the state’s GDP and 15% of its employment. QDB, being the national development bank, is mandated by the government to develop a robust private sector.
One important initiative that was launched by QDB is the Al Dhameen programme, which aims to overcome financing barriers faced by economically viable Qatari SMEs. The programme is designed to improve access to financing for SMEs by covering a significant part of the credit risk faced by the local banks in the event that an SME fails to repay the loan.
The programme aims to increase the number of SMEs by making financing more accessible and affordable; grow SMEs into larger corporations by providing access to financing for investments and working capital; facilitate the development of high priority sectors by providing incentives for banks to finance manufacturing, health care and education; and promote sustainable funding by enabling SMEs to establish credit history with banks.
The programme has been successful both in terms of its performance and in terms of changing the culture of lending for SMEs by unlocking capital for small businesses. During 2015 we issued credit guarantees for 100 SMEs with a total value of QR243m ($66.7m).
How successful has the QDB been at getting local SME products on the international market?
AL KHALIFA: One of the key mandates of QDB is to develop and promote Qatari exporters, with a particular focus on non-hydrocarbons industries. During 2015 QBD provided over 140 SMEs with export opportunities and Qatari SMEs signed exporting contracts worth over QR285m ($78.2m).
In addition, to make Qatari exports more attractive to foreign buyers and protect local exporters from potential risks, we issued export credit insurance guarantees for 156 Qatari SMEs with a total value of approximately QR55m ($15.1m). We have also provided non-financial support to Qatari exporters, for example by supporting the participation of 103 Qatari SMEs in eight international exhibitions.
What has been done to realise a common definition of what constitutes an SME in Qatar?
AL KHALIFA: QDB has launched the National SME Definition of Qatar, an initiative aimed at clearly identifying SMEs and thereby improving the policies to support the development of the SME segment.
In terms of classification, official SME status in Qatar is only assigned to companies registered in accordance with the laws of the state, whose number of employees does not exceed 250 (with the exception of companies operating in the creative industries sector, whose number of employees should not exceed 100), and which have annual turnover that does not exceed a total of QR100m ($27.4m).
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