More can be done by Qatar banks to help SMEs grow to potential

Having recognised the role SMEs play in the economic development of the region, Qatar banks are continuing to create specialised solutions, offering a wide range of banking and financial services, from bank accounts to loans, with the aim of helping SMEs grow beyond their potential.

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In the past, the SME sector in Qatar has been historically underserved by the banking sector and growth has subsequently been very slow. This comes as little surprise taking into consideration the multitude of large hydrocarbon projects in existence, which are seen by the banks as not only more reliable, but also the most direct route to profit.

Momentum in the drive to boost the private sector and more specifically, SMEs in Qatar, are gathering pace. The government is determined to create a more balanced economy. There is a push for more funding of SMEs coming from Qatar Development Bank, which guarantees up to 85 percent of commercial loans, limited to QR 15 million, for SME projects under its Al Dhameen programme.

Cash flow

John Richards, CEO of compareit4me group, which operates finance comparison websites across the Middle East, said: “Cash flow is the life blood for any business and this is particularly true for a small startup, where revenues are in their infancy and the business requires a lot of investment to grow.”Cash flow

He added: “Given the importance of SMEs in any market, it is essential local banks and government support their development and create banking products designed around the needs of startups.”

SME contributions

In economies across the globe, SMEs make significant contributions in areas such as innovation, efficiency, job creation and international competitiveness. Even in mature economies like the US, the impact of SMEs is huge.

It was reported that 98 percent of the 302,000 companies which exported goods in 2011 were SMEs with fewer than 500 employees, while small firms accounted for 63 percent of the net new jobs created between 1993 and mid-2013.Small business

With the SME sector in Qatar presently only contributing 10 percent to GDP, there is a long way to go to match the figures of the UAE for example and the more established economies.

 

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