Oman’s SMEs: Fuelling new economic growth for a brighter future

T-Mag Wednesday 19/September/2018 19:46 PM
By: Times News Service
Oman’s SMEs: Fuelling new economic growth for a brighter future

When His Majesty Sultan Qaboos bin Said took the reins of the Renaissance in 1970, he envisioned a strong, self-sustainable Oman, which at its core, consisted of eager, hardworking men and women who strove to always achieve the best.
Whether this meant becoming an integral cog in the engine of Oman’s largest companies, or starting a new enterprise for themselves, the path of the Renaissance was one everyone in Oman would walk on together.
Today, Oman’s SME Development Fund (SMEF) is one of many grassroots development organisations that are leading the economic and social growth of the Sultanate. Established in 2014 in collaboration with the Omani Authority for Partnership of Development, the SMEF has, so far, gone on to inculcate the culture of SME development across not just the current crop of professionals, but the next generation as well.
“SMEF has drawn up a four-point plan to address the needs of the SME sector and to encourage entrepreneurship among the youth and more experienced people in Oman,” said Otbah Abdullah Al Harmali, Deputy Manager (Training) for the SME Development Fund. “Accordingly, the Fund seeks to accomplish the following: entrepreneurship development, nurturing, funding and legitimising.”
“Our objective is to develop entrepreneurship and the financing of small and medium enterprises in the Sultanate to bridge 10 per cent of the ‘missing middle’ and to help create a cluster of external capability in the form of entrepreneurial educational institutions, training, accounting support, incubation, angel investing, and establish a climate of SME development in collaboration with the government, academia, private stakeholders and the youth of Oman,” he added.
Al Harmali also acknowledged that it was important to focus the SMEF’s efforts across multiple strata of society, to imbue the proactive nature of entrepreneurship across all people.
“We’ve conducted awareness workshops for over 30,000 students in 32 colleges and universities,” said Al Harmali. “Four campus companies were created in four colleges, and we trained 83 faculties under the Certified Entrepreneurship Educator Programme, in collaboration with Change School Babson, Harvard University, Mentoring Australia, Singapore National University, and the London Business School.”
Al Harmali also shed light on the efforts of INMA, an Omani commercial training provider providing technical training services to many companies, including Petroleum Development Oman (PDO), British Petroleum Oman and Oman Oil.
“In 2018, the INMA E-Club was created,” he recalled. “The INMA Leadership Programme aims to develop leadership skills and knowledge in entrepreneurship culture in E-Club leaders for over 200 students. We have had two Senior Entrepreneurship Programmes, and trained 384 senior professionals of the Ministry of Defence under the Senior Entrepreneur Module, aimed to train senior officers and staff to utilise their long years of experience in entrepreneurship.”
Skills and training
“We also trained 30 people under 30 under Ta’sis, a programme which looks to provide skills to workers in their oil industry in order to increase their versatility in collaboration with OPAL (Oman Society for Petroleum Services), to groom Omani talent in the oil and gas sector into entrepreneurs,” said Al Harmali. “We also set up 23 SME owners under the Leading Innovation Transformation (LIT) Programme to embed high impact transformational innovation across organisations.”
Al Harmali observed that the development of SMEs was crucial to establishing a sustainable, thriving economy for Oman’s long-term growth.
“With a growing population of youth entering the workspace, creation of employment is a key imperative, and the most effective way of building long-term human capital for a country is to develop leadership and leaders,” he told Times of Oman. “These programmes must be applied to assess and develop Omani nationals that are likely to benefit and thus add value to the firm and the nation at large, providing new career options for the growth and creation of new jobs in our new markets. But more is needed to build the skills the nation needs in different fields, and then we can fill the gap in the market with skilled Omanis to sustain our economy.”
“Under SMEF, we hope to create 7,500 entrepreneurs and to see some of them grow to be large firms,” added Al Harmali. “We hope to add over 50,000 new jobs and to help create a cluster of external capabilities in the form of ‘entrepreneurial’ educational institutions. We may not be able to identify the correct ways how real entrepreneurs can start, build, and run successful companies in highly competitive global markets, but we can provide insights from an insider’s perspective to help SMEs make better-informed business and leadership decisions with five critical skills that we think the SMEs owners need.”
“Being able to effectively manage finances is critical, in addition to marketing, sales and customer service,” he said. “Among the most important skills is leadership. Most of our programmes focus on developing the SME owner’s skills by training, accounting support and building financial systems within SMEs. Technology and innovation and a clear path to start what is planned are the most important tools today. We focus on planning but not the implementation process and what we can perform better.”
“Tanfeedh, the national programme for enhancing economic growth with targeted sectors identified are manufacturing, tourism, transport and logistics, mining, and fisheries as areas for expansion,” explained Al Harmali. “The SME Development Fund has tailored a set of products specially designed to provide SMEs with flexible funding to meet their needs with a loan amount of OMR50,000 up to OMR500,000, at a subsidised rate of interest plus providing accounting support with softwares within those sectors.”
While he did acknowledge that Oman’s public sector was at present the country’s largest employer, Al Harmali did recognise the need for other avenues of employment.
He explained, “self-sufficient means different things to different people, but for us, working smarter is superior to working harder. The Oman government is the biggest employer of people, but that cannot continue forever and we need to find new ways of generating jobs. One of them is to increase the size of the SME sector, which accounts for 60 to 70 per cent of jobs in most countries.”
On success
“Being successful means learning from those who have already achieved their goals and learning from our mistakes,” said Al Harmali. “Developing our skills is most important to becoming creative.”
While Oman is ramping up its efforts to make the establishment of SMEs easier, Haitham Al Busafi, the founder of Busafi Architecture, said a more streamlined system would help small business owners in future.
“I set up an architecture firm, so for that you need to have the right qualifications because this is a specialised company,” he said. “You have to obtain a licence from the Ministry of Commerce and Industry to practice architecture or any other engineering consultancy. I provided all the documents needed and it took about a month to get my licence after the screening process. You need to register your company, and then you need to mention the type of business conducted. Certain businesses require approval from government bodies, and in our case, we need to get the approval in which they check that you have actually studied architecture and have the experience required to open the consultancy.”
“After this, we go through the process of renting an office space, and then you go to the Muscat Municipality to register your consultancy so you can submit drawings and get projects from the municipality,” added Al Busafi. “If you are submitting drawings to other areas, they need to approve it at the local wilayat. All of this took some three months, and I think it went fairly okay, if not super smoothly.”
“We wanted to specialise only in architecture and not other services, but here, they don’t allow that, you have to have a general engineering consultancy,” he said. “There seems to be an improper understanding of what architects and engineers do, whereas in other countries, this issue is resolved in a different way.”
Al Busafi also suggested certain changes to the format of the current SME application system.
“With the Ministry of Commerce and Industry, as well as other organisations, there are understandably a lot of requirements and everything was done through paper, because they don’t want to dig through the archives and bring up old data,” he explained. “Now, the same requirements that they previously requested are in a digital format. But there are some things that need to be removed, because it would be better to link other government agencies through this network, so that you don’t have to submit the same documents and the same forms to different authorities.”
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