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BankMuscat chief executive AbdulRazak Ali Issa speaks to BusinessToday on why the bank is concentrating on SMEs

Can you give details of BankMuscat's workshop for small and medium enterprises?
The SME Credit and Marketing Department of BankMuscat, through Al Wathbah, a comprehensive suite of programme-lending solutions for the small and medium scale sector, has taken the initiative to organise special training workshops targeting entrepreneurs and owners of small and medium businesses for the first time, free of cost.

Al Wathbah is aiming to conduct a series of these workshops, entitled 'Importance of Finance and Accounting to SMEs', in collaboration with Business Edge - International Finance Corporation (IFC), an international organisation whose mission is to promote sustainable private sector investment and a member of the World Bank Group. The workshops cover topics of importance to entrepreneurs and businessmen, which include ‘Importance of Finance and Accounting to SMEs’, ‘Introduction to Marketing Concepts’, ‘Pricing and Pricing Strategy’ and the ‘Target Markets’. A special professional trainer, Rami Camel Toueg from IFC, conducts these workshops.

The first workshop attended by Al Wathbah customers was held on October 25, 2007. To ensure that wider customer groups are reached, the second workshop was held in Sohar, targeting businesspeople from Al Batinah region. There is one more workshop scheduled in February this year and we will be planning for more in the future.

What is the collaboration between BankMuscat and the International Finance Corporation?
BankMuscat has always striven to explore ways to provide greater value to our customer base across our spread of banking facilities. In June 2006, in order to strategically position us in the SME market, we signed an agreement with the International Finance Corporation (IFC) to technically assist the bank to expand our SME business and customer base, which included six modules including market research, formalising a strategy, refining segmentation, adapting products, improving sales and delivery channels, and structuring the promotion strategy. The consultancy project was successfully completed in May 2007 as many of the final recommendations have already been implemented and many are under way.

As a step further in the SME arena, we are glad to join hands once again with IFC through their Business Edge programme to provide business-related workshops to interested Omanis to help them start and sustain their businesses through fulfilling the needs of people. It is needless to say that BankMuscat is in partnership with IFC on various other banking fronts.

BankMuscat has launched a number of initiatives to promote SMEs. Why is the bank focusing on this sector?
It is widely believed that SMEs constitute the backbone of all economies and are the highest generators of employment for the local youth. Hence, of late, the development of SMEs in Oman has been receiving a great deal of government attention and focus. In March 2007, as per the directives of H M Sultan Qaboos bin Said, a new General Directorate for the Development of Small and Medium Enterprises was established at the Ministry of Commerce and Industry.
BankMuscat, as a responsible corporate citizen, and foreseeing the opportunities in the SME market, expanded its various existing SME schemes and established a full department to cater to them. Accordingly, a suite of programming lending solutions under the brand name of Al Wathbah was launched. Furthermore, the SME department also offers discretionary lending solutions up to RO250,000 to medium enterprises with annual sales of up to RO1mn. To provide a further fillip to the sector, the bank provides enhanced advisory services whereby professional advice is offered to the sector on their businesses, the economy and various financial options.

At BankMuscat we realise that SMEs require not only financing but also further support and training. By providing opportunities to Omani businesspersons, we aim at assisting to develop their knowledge and skill base. This will help in developing the SME sector to play a much bigger role in the growth of the national economy. Such workshops that are offered through Al Wathbah provide a great opportunity for us to engage with entrepreneurs and hence enable us to better understand their requirements.

I am glad to say that these workshops are not the only initiatives taken by Al Wathbah. The programme was involved in many SME-related initiatives not only in Muscat but also around Oman. In 2007, Al Wathbah was a golden sponsor of the ‘Developing Small and Medium Enterprises Horizons’ conference that was organised by the Ministry of Commerce and Industry as part of its ‘Business Umbrella Programme 2007’. Al Wathbah also participated in Al Maraa festival targeting women since the bank has developed a set of products that meet the Omani businesswoman's needs. Al Wathbah was also the main sponsor of the ‘Business Excellence and the SME’ conference organised by Heart Beat Oman that was supported by the Oman Chamber of Commerce and Industry (OCCI).

How important are SMEs for the development of the sultanate’s economy?
As mentioned before, it is a very crucial part of the nation's economy and we are proud to be associated with such workshops that provide the required knowledge and discussion forums for the entrepreneurs.

What are the challenges that SMEs face in Oman and how is BankMuscat helping them overcome these drawbacks?
The small and medium enterprises in Oman and elsewhere face various challenges such as access to finance, lack of management skills and training and labour issues. The bank has been instrumental in solving some of these issues.

For example, the bank has relaxed some of its security requirements to enable smaller companies to obtain credit to run their businesses. It has also organised and sponsored various training programmes and workshops for SMEs in order to enhance their accounting/book keeping and other managerial skills. The bank is committed on all fronts to assist this vital sector to reach higher levels of prosperity. I would like to assure BankMuscat’s continuous support to this crucial segment of the economy in the sultanate through various ways to provide greater value across our spread of banking facilities.