In October 2008, the Qatari Government launched the Qatar National Vision 2030 development plan, in response to the country’s economic situation. Despite sustaining significant growth and rapid advances in social development, a plan was needed to focus investment in areas that would promote growth on a long-term basis. The plan laid out in the National Vision 2030 plan is one that will support the nation’s development into an advanced economy with consistently high living standards.
The backbone of any developed economy is its banking sector. Without the right programmes and initiatives supporting the private sector, growth is unachievable. Given this, Qatar Development Bank is driving several important programmes to support the young entrepreneurs who will power Qatar in the future. World Finance had the opportunity to speak to the CEO of Qatar Development Bank, Abdulaziz bin Nasser al-Khalifa, about some of these initiatives.
SMEs constitute the foundation of a diversified, knowledge-based and sustainable economy
How will Qatar’s National Vision 2030 plan impact the direction of Qatar Development Bank?
Today, Qatar Development Bank (QDB) is a key player, with a core mandate of contributing towards accomplishing the human and economic development pillars of the Qatar National Vision 2030 plan. Our mandate reflects Qatar’s commitment to develop the private sector, as it strongly believes small and medium sized enterprises (SMEs) constitute the foundation of a diversified, knowledge-based and sustainable economy. Being a strategic player in this transformation, QDB enables the diversification of the Qatari economy by promoting and strengthening private sector development. In doing so, QDB supports local entrepreneurs in a number of ways, both financial and non-financial.
How will QDB promote entrepreneurship among SMEs, and why is this important?
Promoting entrepreneurship is at the heart of our mission. In 1997, the government established QDB with the primary objective of accelerating the growth and economic diversification of the private sector in Qatar. Since then, we have greatly expanded our portfolio. Our most important addition is that QDB today actively promotes entrepreneurship and start-ups in various sectors.
To promote the development and growth of SMEs, QDB now effectively implements a multi-faceted strategic roadmap for start-up development. This includes five key components: specialised consultancy for start-ups, legal support, assistance with financing and audit, marketing and promotion, and matchmaking support with importers abroad. Furthermore, while we support start-ups on every step of their journey, every existing SME we deal with is also eligible to tap into any of these five resources, as per their circumstantial demands.
Lastly, we also support SMEs through the launch of our one-stop shop (OSS) multi-service support centre. Through it, we promote entrepreneurship among SMEs by simplifying market entry for new companies that focus on technology and operate eco-friendly business models. With the opening of OSS, our products and services became more readily available to SMEs, who may now avail themselves of our developmental resources in a single location.
Most importantly, at our OSS we also host the full-service offices of various Qatari ministries and government departments, with whom many SMEs regularly work. In addition, we facilitate official state procedures through our legal consultancy service.
We are strong believers in the power of small businesses to innovate and create value for society. Therefore, we are committed to providing innovative small businesses with a supportive environment, so they can unlock our country’s human potential.
What role does QDB play in promoting the nation’s private sector?
To promote the local private sector, QDB offers a wide-ranging support programme across myriad industries. Furthermore, we have adopted a range of financing and non-financing products, aimed at unlocking access to international markets for local businesses.
Within the country, QDB collaborates with a group of preeminent partners to organise competitions for the creation of start-ups, such as the Al-Fikra National Business Competition. Our strategic partners for these endeavours include both local entities and international corporate, education and petroleum giants operating within Qatar.
Other schemes, such as the Jahiz I and Jahiz II initiatives, seek to empower existing local SMEs that are operating across a diverse range of industries, including chemicals, electronics, plastics, wooden materials, and food. The purpose of these initiatives is to develop the non-oil and gas sectors of the Qatari economy.
Finally, we are firmly committed to the export and promotion of Qatari products across the global marketplace. We regularly conduct studies of Qatari companies that have flourished in their transactions in the international marketplace, and we analyse the causes of their success. Based on our results, we identify importers and arrange matchmaking meetings between local exporters and prospective importers through participation in international and regional trade fairs.
Qatar currently has a large youth population. What policies has QDB pursued to support this demographic?
Our mission has been to instil the spirit of entrepreneurship in the youth of Qatar. We wish to inspire them to lead the change they want to see in this world. To further this, we launched our prized initiative – the Al-Fikra National Business Competition, a nationwide challenge that promotes entrepreneurship and inspires a new generation of Qatari business leaders. Our annual competition is open to university students, entrepreneurs and working professionals.
The competition is based on a team’s ability to successfully propose and develop a workable business concept that can achieve success in the local market. Prizes for the top five entrants include free incubation, admission to an integrated consultancy programme, and access to our financing products. We have been delighted with the reception that Al-Fikra has received over the past four editions, and have recently launched the fifth edition, which is testament to the success the competition has achieved in filling a big void in the field of entrepreneurship and encouraging new businesses.
QDB has taken a role in major projects, including Al-Dhameen and the Jahiz I and II projects. Can you expand on these?
At QDB, we see ourselves at the vanguard of the drive to empower the private sector. Our Al-Dhameen partial loan guarantee scheme is formed in collaboration with local banks and financial institutions. It is at the forefront of our private sector empowerment strategy. It is our way of assisting companies, across all priority sectors, that lack the collateral to secure access to financing.
The Al-Dhameen scheme is viable for both existing companies and young start-ups. Existing companies are eligible for guarantees of up to 75 percent of unsecured outstanding principal loans and financing limits of up to QAR 15m ($4.1m). On the other hand, start-ups that meet our basic criteria are eligible for up to 85 percent of the loan amount.
Jahiz I offers 32 plots to Qatari business owners and entrepreneurs at a competitive lease rate to execute ambitious, eco-friendly industrial projects in the chemical, electronics, plastics and wood industries. Jahiz II offers 14 plots to Qatari business owners and entrepreneurs who wish to start food and beverage manufacturing businesses in Qatar.
Furthermore, as part of the Jahiz initiatives, QDB assists applicants through the provision of comprehensive start-up business solutions, which include consultation, development of business plans, and feasibility studies. The purpose of the Jahiz I and Jahiz II initiatives is to accelerate the development of the private sector and diversify the economy by bringing down the many barriers to entry across a number of hi-tech manufacturing sectors. The Jahiz initiatives are aimed at helping the nation achieve greater self-sufficiency.
Prior to the development of the Al Dhameen partial loan guarantee scheme and the Jahiz initiatives, our analysts researched the demand and supply metrics of the local market, as well as the needs of local SMEs. We then analysed our results, and brainstormed how QDB could help improve market conditions and nurture start-ups and SMEs.
Which segments of the private sector are most important to Qatar’s diversification push, and how will QDB assist in that?
We focus our efforts on accelerating the development and diversification of the economy in line with the Qatar National Vision 2030 plan. To achieve this goal, we segmented the local private sector into the categories that are most vital for Qatar’s diversification agenda. We promote these sectors through investments, as well as providing housing and development-related initiatives on behalf of the government.
Currently, the seven sectors we are focusing on are those that are projected to have an overall positive impact on the social and economic standard of living in Qatar. These sectors are agriculture, education, healthcare, industrial development, livestock, fishery and tourism.