Muscat: In its bid to fund a wide variety of business ventures to spur self-employment, the Al Raffd Fund has approved loans worth OMR14 million to SME projects, its Chief Executive Officer Tariq Al Farsi, told the Times of Oman in an exclusive interview.
The Al Raffd Fund started its operations in January this year after being established through a Royal Decree last year. It has a capital of OMR70 million, with OMR7 million increments every year.
"We have already rejected 48 per cent of applications which did not fulfil the laid down conditions. We have a rigorous method of evaluating projects. The proposals are sent to the SME Authority for appraisal and consultations to determine their viability," said the CEO of Al Raffd Fund.
The SME Authority is the supportive arm of the fund, with Al Farsi as the Chairman of its Executive Committee. Al Farsi said that screening also determines any applicant's credit risk factor.
"We start by running a check on the financial credibility of the applicants to make sure the candidates are not blacklisted by any bank and they have not defaulted on their loan repayments. We treat applications the same way banks would consider loan applications. Applicants must have a clean record if they have to stand a chance for project funding," Al Farsi explained.
Al Raffd has four different financing schemes.
The Resource Programme that comes under the Social Security scheme, lends up to OMR10,000 without the administrative and technical fee.
Job seekers can apply for the Establishment Programme which can go up to OMR20,000. The third programme aims at funding entrepreneurs and craftsmen and the loan ceiling is OMR100,000. The fourth financing scheme is for business people who are looking to expand their trades but have already paid 50 per cent of the funding with Al Raffd.
"We consider everything before we make a decision to help them make a successful bid. We provide an advisory service for their business plan, financial projection, marketing and also identify competition. We also take into consideration not only their salaries but other incomes like rentals of their homes and part time jobs when we process their loan applications," Al Farsi pointed out.
The project applicant is expected to make a presentation about his project before a panel of experienced bankers.
"The applicant must have clearly defined project objectives and these should be realistic. The panel of experts would then make a decision according to the presentation and other information the applicant has provided. It is all transparent and we maintain a high standard of professionalism," Al Farsi said.
The Al Raffd Fund Team, which works for 12-hour stretches to process applications, has members hailing from different backgrounds and experience but with one objective — to help self-employment take off in a positive way. It has its own advisory team which helps project owners to market their product to various clients.
"We don't just finance these projects. We work very hard to make sure they successfully find the market for their product. With our help, most of the projects have already taken off quite successfully by signing supply contracts with different companies," the Al Raffd Fund CEO added.
The fund allows an 18-month grace period where the project owner does not pay back anything. In the next 18 months, they pay only half of their instalments. The interest rate is only two per cent in a loan that can be payable over a period of up to 15 years.
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