Oman's Meethaq banking solutions help SMEs grow their business efficiently

Muscat: In line with the bank’s vision ‘To serve you better, everyday’, Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, has been regularly launching various new products and services for the SME sector. Meethaq’s comprehensive suite of SME solutions is designed to empower SMEs to succeed at every stage of their business evolution and grow to their full potential.

Meethaq’s Sharia-compliant SME solutions are unique and provide support to an important sector of the economy. Meethaq’s SME product offerings include working capital finance, term and project finance, contract finance, trade services, currency exchange services and tailored financing solutions for the SMEs based on their business needs. Each Meethaq SME customer is assigned a dedicated Account Relationship Manager with a wealth of experience to provide financial advice and guidance. A brief highlight of Meethaq’s key SME solutions is listed below.

Meethaq’s Ijarah financing solution allows customers to enjoy the utility and benefits of assets, while Meethaq bears the ownership risks associated with the assets until the end of the financing tenor. The ownership of the financed asset is transferred to the customer at the maturity of the financing based on requirements, which include the settlement of all liabilities in accordance with the relevant finance documents. The Ijarah financing solution is best suited for financing the purchase of plant machinery, equipment, property and vehicles.

Diminishing Musharaka is another financing solution, which allows customers to purchase assets in partnership with Meethaq. Based on the concept of ‘Shirkat Al-Milk’, assets are purchased under the joint ownership of both the customer and Meethaq.

Subsequently, Meethaq will lease its ownership in the assets to the customers for their use under a lease agreement. The share of Meethaq in the Musharaka is on a diminishing basis (i.e., The customer from time to time purchases Meethaq’s share in the Musharakah through periodical instalments in accordance with the relevant finance documents). The gradual reduction of Meethaq’s share means a corresponding increase in the share of the customer in the asset, with the entire ownership of the financed asset being transferred to the customer after the final payment.

Other essential solutions offered by Meethaq include bank guarantees to third parties as well as Letters of Credit. These solutions facilitate the import/export of goods or win and complete various contracts awarded by ministries, public sector entities and large corporates respectively. Meethaq also offers a Receivable Financing solution to SMEs, which is essentially a financing facility offered against the assignment of receivables of a specific contract, for their working capital requirements.

Meethaq’s suite of liquidity management solutions allows businesses to manage their excess liquidity efficiently and earn competitive Sharia-compliant profits. Liquidity management solutions include the Meethaq Current Account based on the Islamic contract of Qardh Hassan (interest-free loan), Meethaq Call Deposit Account and Meethaq Fixed Deposits, which are both based on the Islamic concept of a Mudarabah contract between the Rabb al Mal (fund provider) and the manager of funds (Mudarib). In addition, Meethaq also offers Currency Exchange services that SMEs may utilise to buy or sell foreign currencies at competitive rates in a Sharia-compliant manner.

Meethaq’s support for the SME sector is backed by an easy, convenient and quick approval process with minimal documentation. With 24 branches as well as over 40 ATMs and CDMs spread across the Sultanate, Meethaq is the leading Islamic financial services provider in the Sultanate, catering to the varying needs of individuals as well as corporate customers of all sizes including SMEs.

Every Meethaq product goes through Sharia compliance certification by the bank’s Sharia Supervisory Board and is created in line with the guidelines of the Central Bank of Oman. Meethaq plans to continue expanding its services and products this year.