Najahi: Empowering entrepreneurs, powering the nation

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Abdullah Al Jufaili, Head, Retail Enterprises, Bank Muscat shares the host of advantages that the Najahi suite of products offers micro and small businesses to achieve financial independence and success

Why is the micro and small business sector important for Oman?

Micro and small business owners in Oman come from a variety of backgrounds, each with their own reasons for pursuing self-employment. One might wonder why a business that has only three to five employees should be important. The fact is that these businesses might be small but their impact on an economy is anything but small.

Small businesses are major engines of economic growth in the world’s biggest economies like the US, UK and Germany, often accounting for over 60 per cent of the total number of jobs and over 40 per cent of the country’s GDP in many cases. The situation is not all that different in Oman too. Micro and small businesses contribute a lot to our nation and going ahead, they will give even more people an opportunity to achieve financial independence, create employment opportunities and
also encourage innovation at the same time.

How does Bank Muscat gain from the Najahi model?

Securing credit without collateral and accessing innovative banking services have been hurdles faced by micro and small businesses in the past in Oman. As the Sultanate’s largest financial institution, Bank Muscat is at the forefront of addressing this challenge through collateral-free loans offered under Najahi. The loans are offered under standard and templated products such as Flexi Loan, POS Receivable Finance, Contract Loan and Bill Discounting.

So what the Bank is doing through the najahi initiative is to contribute to sustainable business practices and contribute to the strengthening of the National Economy. This is also important from the business point of view, as today’s micro or small customer will very likely become the Bank’s medium-sized or large corporate customer a few years down the line. So our policy of helping retail enterprises take off is also a way of growing our business in an ethical and sustainable way, not to mention the fact that it provides crucial support to the government’s economic diversification strategy.

Can you tell us a bit about the Flexi loan facility?

Bank Muscat’s najahi Flexi Loan can be used to support working capital, business expansion and other business needs. It allows customers to choose when to avail a loan and for what period, thereby helping maintain cash flow which is the lifeblood of any business. Customers pay interest only when they avail the loan and not when the facility is granted.

What are the options available for a customer using Bank Muscat’s POS machine?

For short-term financing, the bank has launched the najahi point of sale (PoS) financing product. The specially-designed short-term finance facilitates borrowing for working capital requirements simply based on the track record of sales that a business routes through their Bank Muscat PoS machines. The higher the proportion of non-cash sales, the higher the loan eligibility.

Some of the key features of najahi PoS financing includes daily installment repayments. A small amount is automatically deducted daily from customers’ bank account to repay the loan. The facility allows najahi customers to keep repaying and replenishing the loan, thereby ensuring assured cash flow.

As with other najahi credit facilities, customers are not required to provide any collateral guarantee for PoS financing. The convenience and speed of najahi PoS finance help customers to meet their requirement of growth financing. In a quick and hassle free process, customers with a one-year PoS track record are eligible to avail the collateral-free finance.

What is the Contract Loan facility?

This is a working capital facility that is provided against contracted jobs for business clients. Contract facility repayment tenor up to a maximum of one year and it provides liquidity support to customers who are executing a contract that they have been awarded.

Tell us about the Bill Discounting facility

Bill Discounting provides cash flow to the business by releasing funds against bills or invoices raised, before they are due. Loan is provided for a maximum tenure of up to 6 months.

What other products are available for najahi customers?

The najahi suite of products also include the value-added najahi Current Account and the najahi Business Credit Card. All the loan products mentioned above are ‘collateral free’.

The value added najahi Current Account offers differentiated services, including Business Debit Card, branded cheque book, and online banking services. The najahi Business Debit Card offers daily withdrawal limit of RO1,000. The business debit card helps customers to meet day-to-day cash requirements conveniently without the need to visit the teller counter for small value transactions. An advantage of having the najahi Business Credit Card is that it offers 0.5 per cent cash back on all purchases made through the card.

So, how can a customer get more details about Najahi?

A customer can approach one of the 14 najahi centres across the Sultanate or call the call centre on 24795555 for more details. Bank Muscat’s approach to MSME finance is particularly unique in that there are dedicated relationship managers at the najahi centres to look after the requirements of micro and small businesses and help them with their financing requirements.

What have been some of the major achievements for Najahi?

Najahi was started by Bank Muscat in 2014 in line with the national goal of supporting the growth of this sector which emerged as an outcome of the SME Development Symposium held in 2013. Over the last 5 years, we have disbursed loans of over RO100 million to more than 2,400 SMEs. It is important to note that Bank Muscat has funded SMEs in more than 50 lines of businesses across all governorates of Oman, so as to contribute to all round development of the Sultanate.