Muscat: Small and medium enterprises (SMEs) are the lifeline of any economy. Just a dream to own a business is not enough; nurturing a growing business needs responsibility. Innovation, ownership ability and capability, creating employment, and accessing legal and financial aid for a business start-up are vital to enhance the scope of the SME sector in Oman.
Governments, associations and large private companies have set up various centres, programmes and funds with an aim to facilitate the development of SMEs.
Education programmes focussing on inculcating entrepreneurship goals in young minds is the first step towards creating awareness and knowledge about enhancing the sector.
One of these leading initiatives is the Fund for Development of Youth Projects, known as "Sharakah", which was established by a Royal Decree in 1998 and shows the on-going commitment and support of the government to entrepreneurs.
Sharakah's mission is to offer financial support and guidance to the SMEs, help build local entrepreneurial capacity, advocate policies related to the SME sector and spread more awareness about entrepreneurship.
Since its establishment, Shara-kah has been working hard to achieve its main objectives, namely supporting Oman's Vision 2020 to diversify the economy, encouraging the creation of SMEs, developing the entrepreneurial capacity of Omanis, assisting in creating sustainable SMEs, and creating job opportunities for the locals.
Sharakah values the importance of exchanging expertise with peers from the region and therefore ensures it remains a part of any SME-related regional event. In 2010, Sharakah was awarded the Special SME Finance Award during the Mediterranean Awards for Global Excellence in Islamic Finance held in Malta.
Further, Sharakah's General Manager Abdullah Al Jufaili has been a member of the Advisory Committee for the Annual ME SME Forum held in Abu Dhabi, UAE for the past two years.
In 2012, Sharakah participated in the 8th INSME annual meeting in South Korea. INSME, which stands for International Network for Small and Medium Enterprises, is a non-profit association which strives to stimulate transitional cooperation and public-private partnership in the field of innovation and technology transfers to the SMEs.
Al Jufaili, INSME member, delivered a presentation on the "Role of social media in promoting and supporting SMEs".
In 2008 and 2009, Sharakah collaborated with Intilaaqah for their Annual Intilaaqah Awards by providing an investment of OMR10,000 to encourage young Omani entrepreneurs who want to establish or expand their businesses.
The investment amount was given to the winners of the awards.
Since its inception, Sharakah has supported many start-ups and business owners in different regions, from different sectors.
The objective is to ensure sustainability of the businesses it supports and creating employment opportunities.
The majority of the projects — 39 — thus supported are in the Governorate of Muscat, five in the Governorate of Al Batinah South, three in the Governorate of Al Buraimi, six in the Governorate of Al Dakhiliyah, seven in the Governorate of Dhofar, one in the Governorate of Al Wusta and two projects in the Governorate of Al Sharqiyah South.
Sharakah's role goes beyond financing. Till date, Sharakah has provided support to more than 70 projects.
Three of these projects have paid off the loan amount and are continuing to grow. In 2008, seven projects were funded. In 2009, Sharakah funded five projects, and in 2011, the amount sanctioned for such projects was OMR491,679. These projects have created 26 additional job opportunities in the market. In 2010, Sharakah funded eight projects in different fields while 10 were funded in 2012.
"This year we have targeted a minimum of 12 projects with an investment of OMR660,000. We have already invested OMR369,500 and are looking for more projects to support. The challenge is to find viable projects which fit the criteria," said Al Jufaili, adding: "Generally, we look for projects that are competitive in their respective sectors, managed by a committed entrepreneur and have opportunities to grow."
In its efforts to improve the level of services offered to SMEs in the Sultanate of Oman, Sharakah has achieved another milestone by becoming ISO 9001:2008 quality management system.
The certification recognises that Sharakah has standardised processes and procedures that adhere to international quality systems standards.
Further, as part of Sharakah's contribution to capacity building and skills development, it has delivered eight workshops titled "dynamic entrepreneurship" for more than 200 participants, most of whom were college students.
The objective of the workshop was to develop a deeper understanding of cash flow statements and enlighten the participants about the different factors that could affect business performance.
In its effort to equip aspiring entrepreneurs, Sharakah and Grant Thornton Abu Timam inked a deal in March 2012 to support the development of SMEs in Oman, where Sharakah works closely to help entrepreneurs who are seeking to establish or grow their businesses, to learn how to develop viable business plans.
Likewise, Sharakah signed an agreement with Jusoor, a corporate social responsibility entity targeted at developing the community in the Governorate of North Al Batinah.
The objective was to promote leadership among Omanis in that governorate and to contribute towards positively impacting the targeted communities.
Similarly, Sharakah has signed an agreement with the Public Establishment for Industrial Estate (PEIE), aimed at developing the SMEs located in National Business Centre by organising a workshop and free consultation session every month for the tenants.
Over the course of 13 years, Sharakah has supported more than 60 businesses in different sectors and from different governorates in the Sultanate.
Some of these businesses include Love at First Bite multi cuisine lounge in the wilayat of Bausher, Salim Al Mawaly Trading, a bricks factory in the wilayat of Suwaiq, Wadi Samail Equipments — renting construction equipment in the wilayat of Samail, Mazoon Environmental & Technical Services in the wilayat of Seeb, as also Gloria Jean's Coffees, a franchise which offers high quality coffee products and has two outlets in Muscat.
Other projects are Lab Scientific and Laboratory Supplies which is involved in the supply of laboratory chemicals, and is also the agent for Sigma Aldrich Corporation.
SASLO Training Centre is a legal training centre providing various types of legal training, research and translation services and is located in Muscat.
Fantasia Art Production owned by a renowned Omani actor is involved in art and production and they are producing short films, serials, documentaries and also organising other promotional functions. Abu Luwidha Trading is involved in long distance transport of freight, bulk liquids and equipment.
Sharakah has an ambitious five-year strategy that looks at improving its internal operations as well as improving what it delivers to the SME sector.
Indeed, Sharakah is planning to support more businesses not only financially, but also through guidance, mentoring and consultation.
For instance, Sharakah is developing a Business Performance Monitoring Tool that will enable it to monitor the progress of businesses supported by it and ensure that they are on the right track.
This rigorous approach will ensure that Sharakah evaluates all aspects of the business, including operations, finance, marketing and branding, to name a few.
Along similar lines, Sharakah has signed an agreement with Light House Consultant to develop a tool that will help Sharakah assess the entrepreneurial capacity of applicants and would ensure that it benchmarks aspiring entrepreneurs against clearly defined criteria.
Sharakah will continue to deliver workshops on a voluntary basis for students on how to manage businesses and educate them about the responsibilities it brings.
Halima Al Riyami, a marketing specialist at Sharakah, said, "Lately, we have been active on various social media channels (Facebook, LinkedIn and Twitter) and plan to engage more with youngsters and help spread more awareness about entrepreneurship and our services."
"Further, we are working on introducing a scheme that is Sharia compliant to serve the needs of entrepreneurs who are seeking Sharia compliant financial support. In fact, our equity scheme "in principle" follows the guidelines of Islamic finance," Al Jufaili explained.