Sunday 29, October 2017 by Jessica Combes

Meethaq fosters SME development


Omani bank Meethaq has enhanced a bouquet of innovative Shari'ah-compliant products and services for small and medium enterprises (SMEs).

Aimed at helping SMEs succeed in the marketplace, the exclusive range of Meethaq SME offerings include working capital finance, term and project finance, trade services and contract finance.

Alongside tailored Shari'ah-compliant financing solutions, the enhanced Meethaq products and services for SMEs include AccelerateSME, a new dedicated SME portal, dedicated account relationship managers and sector specific seminars and conferences to position Meethaq as market leader in the SME space in Oman.

“Aligning with the national objective of stimulating an entrepreneurial mind-set, Meethaq is focused on strategic initiatives to complement and add value to the country's progress and development. Meethaq remains committed to working hand-in-hand with the government and partners to create a favourable environment for SMEs in Oman," said Sulaiman Al Harthy, Deputy Chief Executive Officer–Islamic Banking.

Access to financing is one of the key challenges facing SMEs in Oman. The new Meethaq offerings address this critical need. Meeting the critical need for working capital, Meethaq offers goods financing.

"As the powerhouse of Islamic finance in Oman, Meethaq extends support to all key economic sectors in the Sultanate. Alongside mandates to finance major projects, Meethaq is committed to fostering national talent and providing support for SMEs that create meaningful employment opportunities. The role of SMEs is highly important as Oman is witnessing a gradual shift towards SMEs, addressing the requirements of youth representing more than 50 per cent of the country's population," added Al Harthy.

Ijarah is a product that allows customers to enjoy the utility and benefits of assets, while Meethaq bears the ownership risks associated with the assets till the end of contract. Ijarah can be availed to finance plant and machinery, equipment and vehicles. 

Diminishing Musharakah (DM) is a product that allows customers to be partners with Meethaq as joint owners of assets based on the concept of Shirkat Al-Milk. Under this mode of financing, Meethaq enters into agreement with customers to purchase assets selected by them under joint ownership. The asset is then placed in the possession of customers for their use under a lease agreement with Meethaq.

Meethaq also provides bank assurance in the form of guarantee to third party, undertaking to pay a certain amount to the beneficiary (third party) upon failure of customers to meet certain obligations to beneficiaries. Meethaq provides the guarantee on the basis of Kafalah contract.

Meethaq Islamic Banking has launched various initiatives to support SME development in Oman. The ‘Meethaq Accelerate SME’ portal provides startups and SMEs with access to the most comprehensive source of business resources, services and funding solutions. The online portal is designed to help SMEs achieve their business goals and thereby promote SME development in Oman.

To help enable the growth of SMEs, the Accelerate SME portal addresses the challenges faced by SMEs in the Sultanate such as unfamiliarity with procedures on how to set up business, access to tailored funding solutions to support growth and how to scale business and connect with partners and customers. The Meethaq Accelerate SME portal, developed in association with Thomson Reuters, is free to join.

Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which protects customers and complements the Islamic banking industry. Every Meethaq product goes through the process of Shari'ah compliance certification by the Shari'ah Supervisory Board and is created in line with the guidelines of the Central Bank of Oman.