The drive to create a vibrant small and medium-sized enterprise (SME) sector in Qatar has recently been given a boost with the launch of an innovative financing package devised by Qatar Development Bank (QDB). The Doha-based bank has partnered with five institutions to provide financing to existing and new SMEs by guaranteeing bank lending under its new Al Dhameen scheme. The banks participating in the scheme are Qatar National Bank, Qatar International Islamic Bank (QIIB), Al Rayan Bank, Gulf Bank and Commercial Bank.

Al Dhameen primarily targets SMEs with an annual revenue turnover of up to 40 million Qatari riyals ($11 million). For new start-ups, the program guarantees 85% of the facility, up to 10 million riyals. For existing eligible SMEs, Al Dhameen guarantees 75% of the principal with the maximum financing available capped at 8 million riyals.

The 100% state-owned bank finances small and medium-sized industrial projects and provides technical assistance and advice to entrepreneurs and industrialists to help get their projects off the ground. QDB also provides consultancy services and financing for projects in education, agriculture, fisheries, healthcare, animal resources and tourism sectors.

Following extensive research and market studies carried out by QDB, access to funding was found to be the biggest hurdle faced by the private sector, and SMEs in particular, because of guarantees required by banks operating in the country. With the Qatar National Vision 2030 in mind, QDB launched the new guarantor program, which has been designed to develop high-priority sectors, such as manufacturing and knowledge-based ventures.

Al Dhameen is also expected to encourage other banks in Qatar to increase their lending to SMEs, especially to those that hold potential but are not in a position to leverage assets or provide accounting records to secure such loans. The scheme will enable SMEs to build up a credit history and make them better positioned to apply for credit facilities from banks in the future without significant guarantees.

Furthermore, in January QDB launched the Qatar Export Development Agency (Tasdeer) that aims to open new markets for Qatari products not connected to the emirate’s oil and gas sector and raise their competitiveness worldwide.