1. ODB EXPERIENCE IN FINANCING SMEs
Present by: Eng. Ahmed Al-Hajri
Prepared by: Eng. Mahmood Al-Yafai

2. The role of the Oman Development Bank (ODB) in financing SMEs
Presentation Section
A look at our presentation agenda
SMEs in the World
SMEs Definition in Oman
The role of the Oman Development Bank (ODB) in financing SMEs
Prepared by: Eng. Mahmood Al-Yafai

3. Section End Difficulties Facing SMEs Sector Based on ODB experience
Challenges: External & Internal
Suggested solutions to the challenges facing SMEs
Section End
A look at our presentation agenda
Prepared by: Eng. Mahmood Al-Yafai

4. SMEs in the World
Small and medium-sized Enterprises (SMEs) are one of the pillars of the economy in the world and represent 95% of the total registered companies and provide between 40% to 60% of the total employment.
SMEs (officially) contribute about 33% of the GDP of the developing economies as they offer up to 45% of employment.
Prepared by: Eng. Mahmood Al-Yafai

5. SMEs Definition in Oman
Micro Enterprises:
with less than 5 working people and annual sales of less than OMR 25,000 (nearly USD 65,000)
Small Enterprises:
between ( ) working people and sales ranging between OMR(25,000– 250,000) USD(65,000 – 650,000)
Medium Enterprises:
between ( ) working people and sales range between OMR (250, Mn) USD(650, Mn)
Prepared by: Eng. Mahmood Al-Yafai

6. The role of the Oman Development Bank (ODB) in financing SMEs
ODB Mission
Provide subsidized loans to various economical and developmental activities in the country and focus on projects with value added.
Additional Tasks Carried out By ODB:
Beside the core business, ODB is managing the following Portfolio and Programs:
Government Soft Loan Portfolio.
Al Rafad Fund Portfolio.
Government Grants.
Agriculture & Fisheries Researches Fund.
Prepared by: Eng. Mahmood Al-Yafai

7. Financing Sectors Development sectors, which the bank financed 02 0406
Information
Technology
Fisheries
Health 01 03 05
Agriculture & Livestock
Industrial
Educational
Prepared by: Eng. Mahmood Al-Yafai

8. Offices & professional institutions
Financing Sectors
Development sectors, which the bank financed 08 10
Offices & professional institutions
Light Workshops 07 09
Tourism
Traditional crafts
Prepared by: Eng. Mahmood Al-Yafai

9. Portfolio Performance

10. ---------------------------------------------------------------------
Past Dues Percentage

11. ---------------------------------------------------------------------
Accumulated Loans Portfolio from 2009 to 2016
No. of Jobs
Created
(Estimation )
No. Of Loan
Loan Amount (Mn OMR)
Turnover
(Mn OMR)
Criteria 19 18
158
4,083 92 44 96
3,673
32,849
160
1,263
68,115
404 50 53
4,120
33,364
272
1,570
79,991
Large
Medium
Micro
Small
Grand Total
Prepared by: Eng. Mahmood Al-Yafai

12. ---------------------------------------------------------------------
Accumulated Loans Portfolio from 2009 to 2016 (Sector Wise)
No. of Jobs
Created
(Estimation )
Loan Amount (Mn OMR)
Sectors
No. Of Loans
Services
3300 32
8,540
Industries
5610 80
16,303
Education
579 18
3,094
Health
145 5
709
Agriculture
8171 7
17,360
Tourism
184 37
1,965
Fisheries
15375 54
32,020
Total
33,364
272
79,991
Prepared by: Eng. Mahmood Al-Yafai

13. Challenges : Internal and related to projects
Challenges at the inception period:
Challenges after inception :
Absence of feasibility study and unawareness of its importance.
Financial Issues
Idea of the project is based on copying other similar projects.
Managerial Problems
Marketing problems
Lack of investor’s expertise experience and required skills (Know How).
Lack of self financial resources of the investor and high leverage.
Absence of proper planning and thus, fear of failure.
Financial issues in terms of liquidity shortage to meet project needs, not maintaining accounting records, continuing selling in credit with out monitoring the company needs of cash flow, overlap between the owners bank accounts and business accounts.
Managerial problems due to lack of full-time involvement in the project, inefficiency of personnel , labor issued, lack of strategic planning and marketing plans.
Marketing problems as a result of the lack of target market study and marketing plans due to lack of experience.
Prepared by: Eng. Mahmood Al-Yafai

14. ---------------------------------------------------------------
Challenges : External
The weakness of technical support and advisory services.
Unavailability of information and databases of markets.
Roles overlap between the different entities serving the same sector.
Limitation of the market size and getting affected by surrounding environment.
Limited volume of cooperation, coordination and coherence between SMEs and large corporate, thereby reducing the positive results between sectors (Backward & Forward Linkage).
Prepared by: Eng. Mahmood Al-Yafai

15. ---------------------------------------------------------------
Suggested solutions to the challenges facing SMEs
Administrative
Full-time involvement in project operations.
The qualification and experience in the area of the project.
Good selection of management.
preparation of an integrated action plan
Financial
Good management of the financial resources because the successful business requires good financial control
Marketing
Readiness of operational and marketing plans and trained staff before the commencement of the project operations in order to implement the business vision and achieve targets.
Prepared by: Eng. Mahmood Al-Yafai

16. solutions
Set up of business incubators for some economic activities operating under the scope of small and medium-sized enterprises.
Establishment of communication channels (audio and visual), to strengthen the role of the media to create awareness.
At the social level, to continue in the dissemination and promotion of self-employment culture among young people.
Prepared by: Eng. Mahmood Al-Yafai

17. SMEs pioneers focus should not be on funding only
Set up a national rehabilitation center for sick projects under the supervision of governmental authorities
Create customize programs to finance SMEs
To give priority in the support of enterprises owned by nationals to enable them provide their services more efficiently and effectively.
SMEs pioneers focus should not be on funding only as a key factor to encourage and motivate those projects, but through training and rehabilitation, especially for beginners, pioneers, owners, and individual initiatives, and providing technical support and advisory services, and continue coordination between lenders and other supporting enteritis to create the appropriate environment needed for such projects.
Create customize programs to finance SMEs under the Venture Capital model and strengthen the loan guarantee programs and networks in support of pilot projects, Especially with the reluctance of many conventional organizations funding this sector due to the high risks.
Prepared by: Eng. Mahmood Al-Yafai

18. Thank You Present by: Eng. Ahmed Al-Hajri
Prepared by: Eng. Mahmood Al-Yafai