One who aims for the stars shoots higher than the one who aims for the trees...... Oman Economic Forum, 2012 SME Development Fund “..youth are the present

One who aims for the stars shoots higher than the one who aims for the trees......

Oman Economic Forum, 2012SME Development Fund

“..youth are the present and future of the nation…”

His Majesty the Sultan, while inauguration the 5th session of the Council of Oman

Developing Small & Medium Enterprises



OUTLINE

1. SME development – why bother?

2. SME development – the challenges

3. SME Fund & the 4 Point Plan – the solution

4. Benefit to the Country & youth

5. So What?

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SME DEVELOPMENT FUNDNEED FOR SMEs IN OMAN

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SME Contribution to Employment and GDP(median values)

Oman ?

Source: Meghana Ayyagari, Thorsten Beck, and Asli Demirguc-Kunt; World Bank paper 3127

Part of: Vision 2020; 8th five yr. plan; Budget 2012



SME DEVELOPMENT FUNDCHALLENGES (internal & external)…

1. Insufficient interest in & understanding of entrepreneurship 2. Inadequate understanding of cash flow, marketing,

management3. Market access: private customers and government tenders4. Gaps in the delivery of finance:

a. Availability - 200% collateral, delays kill opportunityb. Inadequate monitoring leads to bad debt.

5. Business discipline, commitment and customer focus, among existing entrepreneurs

Others: rentals, technology, equity, manpower, administrative proceduressource: World Bank 2004 report; Booze Allen 2009; NCPM survey 2011

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SME DEVELOPMENT FUNDSOLUTION- THE FOUR POINT PLAN

1. ‘Creating’ Entrepreneurship (create new SMEs) Entrepreneurial Campus Developing Senior Potential Entrepreneur

2. Nurturing (making SMEs ‘bankable’) Software; Accounting Support Monitoring Mentoring

3. Funding Speedy & Flexible Financing Interest Subsidy – for compliance with ‘nurturing’

discipline4. Legitimizing

Helping SMEs to break into ‘big boys’ club Website based transparency

Work with all stake holders to create a ‘cluster’ of competence

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NurturingLegitimizing

SME DEVELOPMENT FUNDSME FUND AND NCPM- Operating Structure

SME DEVELOPMENT FUND(under formation)

•CAPITAL RO 100 MILL•PENSION FUNDS/ INVESTORS

NCPM*

•GRANT ($30 mill -1st tranche)•SOFT LOAN ($ 65 mill)•OFFSET PARTNERS

Grants, Staffing

SMEs

UNIVERSITY STUDENTS & POTENTIAL

ENTREPRENEURS

TrainingEXTERNAL AGENCIES

Funding,monitoring

Outsourcing

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*NCPM is the manager & the SPV through which grant finance ($30 mill) routed to the Fund



SME DEVELOPMENT FUNDTHE GOAL (10 yrs.)

1. Achieve profitability from year 2

2. Target 500,0001 students over 10 yrs.

3. Multiplier difficult to estimate - ‘goal’:• 7,500 SMEs; some growing to ‘large’ – depends on ‘Legitimising’ • 50,000 additional jobs• contribute RO 1,000,000,000 to GDP annually

4. Nurture and finance 20001 SMEs

Cluster of support services – accounting, training, incubation, angel investors1Light touch training to 500, 000 students; 2000 SMEs based on available data

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Commercial opportunities

1. Financier – opportunity equal to all six leasing Cos

2. Market access / logistics – both ends of value chain

3. Business Advisory services

4. Incubation- no capacity in manufacturing, logistics• Link in to the Fund; other financiers; NTBI

5. Angel investor network (indebted youth)• Symbiotic relationship: SMEF; Sharaka; Growfin; incubators

SME Fund – NCPM will be glad to help [email protected]

SME DEVELOPMENT FUNDSO WHAT?....Billion Rial question

mailto:[email protected]



Thank You

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“..youth are the present and future of the nation…” His Majesty the Sultan, while inauguration the 5th session of the

Council of Oman

Documents

One who aims for the stars shoots higher than the one who aims for the trees...... Oman Economic Forum, 2012 SME Development Fund “..youth are the present