A 10-point plan aimed at improving small and medium-sized enterprises (SMEs) access to sustainable and convenient financing options has been proposed by the Bahrain Association of Banks (BAB).
Presenting the proposal, the Association’s Chief Executive, Dr. Waheed Al Qasim, called on the Central Bank of Bahrain to continue supporting banks, thereby strengthening their capacity to provide soft loans to small and medium-sized enterprises.
The official said in a meeting with government and private sector stakeholders that Benefit, the national electronic funds transfer system and the national ATM and POS exchange operator, should establish a credit rating system for small and medium-sized enterprises.
Dr Al Qassim also called on insurance companies to work with Tamkeen towards introducing a portfolio that guarantees compensation to affected parties, including banks, in case of default.
He further said that Article 4 of the Labor Fund Law No. 57 of 2006 “Tamkeen” should be amended to extend the scope of lending to the fund from Islamic banks to all banks in Bahrain.
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The association’s president proposed redefining small and medium-sized enterprises by removing the criterion “number of employees” and focusing instead on factors such as annual revenue, performance indicators and other relevant indicators.
He said the audit report should be categorized starting with small and privately owned establishments. The goal is to create simplified reports to help project leaders understand accounting methods and differentiate between personal and institutional accounts.
Dr. Al Qasim should establish specialized departments within banks to train them to evaluate and implement loan applications for small and medium-sized enterprises, as well as create a dedicated academy to train individuals to manage small and medium-sized enterprises. I suggested that there is.
Finally, he proposed stricter regulations and laws to protect the rights of banks and financial institutions to support small and medium-sized enterprises.
BAB believes these proposals will help make lending to SMEs more accessible and affordable, and will encourage banks to lend more money to SMEs.
This will foster the growth of the SME sector, which is an important part of Bahrain’s economy.
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