MUSCAT: Over the last five years, Najahi has been providing a major thrust to small businesses in diversifying the Sultanate’s economy and creating job opportunities for Omani youth. Najahi products and services have created a benchmark for collateral-free lending that supports small businesses and helps in Oman’s rapid growth and development.
The difficulty in accessing credit faced by micro, small and medium-sized businesses was identified as a major challenge during the SME Symposium held at Saih Al Shamikhat in 2013. As the Sultanate’s leading financial institution, Bank Muscat launched a series of initiatives to strengthen the SME sector in Oman and became the only bank in Oman to have a separate team dedicated to providing collateral-free loans. By engaging with the International Finance Corporation (IFC), Bank Muscat developed a comprehensive rollout plan for Najahi, which was launched in 2014. IFC provided valuable expertise on product design, organisation structure and the risk management framework needed for building a strong SME lending franchise for Bank Muscat Najahi, which is rapidly creating sustainable growth and development across all governorates of Oman.
Speaking about the landmark development in micro and small-business financing, Suleiman Hamed al Harthi, Group Chief Personal Banking Officer, Bank Muscat, said: “Facilitating financial inclusion, Bank Muscat Najahi products and services have created a benchmark, helping micro and small businesses to overcome hurdles and chart successful ventures with proper planning, financial discipline and prudent management. Najahi has disbursed loans to over 2,400 customers over the past five years and is proving to be a major support for young Omani entrepreneurs who are becoming job generators in the country. We are particularly happy to note that Najahi loans were extended to customers across as many as 50 different lines of businesses.”
Today, Bank Muscat has a large Najahi team in a variety of roles such as Relationship Management, Credit Analysis and Collections. The Najahi team is based out of 14 Najahi Centres spread across Oman and facilitates a range of short-term and long-term credit facilities for entrepreneurs working on their dream plans.
Najahi offers a range of products to micro and small businesses including loans, current accounts, credit cards and debit cards. Young Omani entrepreneurs can use the flagship Najahi Flexi Loan to take a loan that can be repaid in monthly installments up to a maximum tenure of 36 months. As an innovative adaptation, Najahi customers have the flexibility of availing the loan through a credit card also.
Another pioneering financing scheme is the POS Receivable Finance, a loan product in which the loan eligibility is based on the transactions done in the merchant’s POS machine. For SMEs involved in executing contracts awarded by government agencies or large corporates.
The biggest advantage for small businesses is that the loans are provided collateral-free through various lending programmes. The customer assessment is mainly done through a cash flow analysis and Najahi does not require customers to submit audited financial reports and detailed business plan documents.
Ibrahim al Ismaili, owner of Al Raha Golden and one of the entrepreneurs who has benefitted from Najahi, praised the bank’s role in developing Omani entrepreneurs. He said: “We thank Bank Muscat Najahi for supporting entrepreneurs and participating in the development of micro and small businesses. Because of Najahi, small business owners like me are able to realise our dreams of entrepreneurship and promotion of self-employment among Omani youth. I am happy that thanks to the excellent financing support, I now have two furniture shops in Nizwa and Barka.” Mohammed bin Salim bin Said al Shibli, owner of Qabat Sohar Trading and also a Najahi customer, said that Bank Muscat has always actively provided financing for small businesses, thereby growing the entrepreneurial culture in the Sultanate. He added, “My experience with Najahi has been great and I appreciate the bank’s efforts in this direction. I would like to suggest offering industry specific products to target sectors that are promoted as promising sectors in the national diversification strategy”
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