Muscat: In line with the bank’s vision of “Serving You Better Every Day”, Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, regularly launches various new products and services for the SME sector. Meethaq’s comprehensive suite of SMB solutions are designed to enable SMBs to succeed at every stage of their business development and develop to their full potential.
Meethaq’s Sharia-compliant SME solutions are unique and provide support to an important sector of the economy. Meethaq’s product offerings for SMEs include working capital finance, term and project finance, contract finance, business services, foreign exchange services and tailor-made financing solutions for SMEs based of their business needs. Each Meethaq PME client is assigned a dedicated Account Relationship Manager with extensive experience to provide financial advice and guidance. Below is a brief overview of the main SME solutions from Meethaq.
Meethaq’s Ijarah financing solution enables clients to enjoy the utility and benefits of assets, while Meethaq bears the ownership risks associated with the assets until the end of the financing term. Ownership of the financed asset transfers to the client at the maturity of the financing on a needs basis, which includes the settlement of all liabilities in accordance with the relevant financing documents. The Ijarah financing solution is best suited for financing the purchase of machinery, equipment, real estate and vehicles.
Decrease Musharaka is another financing solution, which allows clients to purchase assets in partnership with Meethaq. Based on the concept of “Shirkat Al-Milk”, the assets are purchased under the joint ownership of the client and Meethaq.
Subsequently, Meethaq will lease its property in the assets to clients for their use under a rental agreement. Meethaq’s share in the Mashraka is on a declining basis (i.e. the client from time to time purchases Meethaq’s share in the Mashraka in periodic installments in accordance with the relevant financial documents). The gradual reduction in Meethaq’s share results in a corresponding increase in the client’s share of the asset, with full ownership of the financed asset being transferred to the client after final payment.
Other essential solutions offered by Meethaq include third party bank guarantees as well as letters of credit. These solutions facilitate the import / export of goods or win and complete the various contracts awarded respectively by ministries, public sector entities and large companies. Meethaq also offers a debt financing solution to SMEs, which is essentially a financing facility offered against the assignment of receivables from a specific contract, for their working capital needs.
Meethaq’s suite of liquidity management solutions enables businesses to effectively manage excess cash and earn competitive Sharia-compliant profits. Liquidity management solutions include Meethaq Current Account based on Qardh Hassan Islamic Contract (Interest Free Loan), Meethaq Call Deposit Account and Meethaq Fixed Deposits, both of which are based on the Islamic concept of a Mudarabah contract between Rabb al Mal (funder) and the fund manager (Mudarib). In addition, Meethaq also offers foreign exchange services that SMEs can use to buy or sell foreign currencies at competitive rates in accordance with Sharia law.
Meethaq’s support for the SME sector relies on a simple, convenient and fast approval process with minimal documentation. With 24 branches as well as over 40 ATMs and CDMs spread across the Sultanate, Meethaq is the leading provider of Islamic financial services in the Sultanate, catering to the varied needs of individuals as well as businesses of all sizes, including SMEs.
Each Meethaq product goes through a Sharia compliance certification by the bank’s Sharia Supervisory Board and is created in accordance with the guidelines of the Central Bank of Oman. Meethaq plans to continue expanding its services and products this year.