Doha: The stimulus package of Qatar Development Bank (QDB), as part of Qatar’s economic support programme to local businesses to overcome the impact of the COVID-19 pandemic, has been increased by an additional QR2bn to QR5bn, the state-backed development agency has revealed.
The QDB, which has been entrusted to support and promote Qatar’s SMEs to establish a vibrant private sector and diversified economy, said that it has already issued support guarantees to more than 3,500 companies since the announcement of the incentive programme.
“The original stimulus package of the National Guarantee Programme – which amounted to QR3bn – has recently been increased by an additional QR2bn, bringing the ceiling of the programme to QR5bn,” QDB told The Peninsula in an exclusive email interview.
“The programme is part of the State’s QR75bn financial stimulus package in response to the pandemic and is managed by QDB. In addition to raising its ceiling, the programme has been extended till December 31, 2020,” said the development bank in response to questions from this newspaper.
“Since its launch, the programme has been playing a pivotal role in reducing the burdens of private sector companies and helping them overcome various challenges. To date, the programme has issued guarantees to more than 3,500 companies.”
The Qatar Central Bank (QCB), the banking and financial sector regulator, in a circular recently directed the Islamic banks and financing companies for postponing the repayment of due loan instalments and the interest or returns arising from those loans for the sectors affected by the COVID-19 pandemic, until December this year.
Earlier in May 2020, in implementation of the directives of the government, QDB included companies operating in the contracting and construction sector to take advantage of the COVID-19 National Response Guarantee Program, and extended the period of QDB’s coverage of the percentage of financing loans granted through the programme to 12 months instead of six months.
QDB also said that companies wholly owned by the private sector and affected by the repercussions of the coronavirus pandemic are entitled to benefit from the national guarantee programme launched by QDB in cooperation with the Ministry of Finance and the QCB and all banks operating in the country, and to obtain financing with the aim of helping them to pay the salaries of their employees and special rental benefits.
In reply to a question about the targeted beneficiaries of included in the relief measure, QDB said that any 100 percent privately owned company incorporated under the regulations applicable to Qatar that has been negatively impacted by the COVID-19 pandemic can apply for the National Guarantee Programme, provided they have a valid commercial licence issued from the Ministry of Commerce and Industry. The programme is not intended for pharmacies, cooperative supermarkets, and real estate companies.
Asked if the support package include the loans provided under QDB’s Al-Dhameen programme, QDB said: “While the National Guarantee Programme was launched in response to the Coronavirus pandemic, Al-Dhameen is a long-standing initiative by the bank that offers indirect financing to startups and SMEs that are unable to provide the necessary financing guarantees or collaterals, which they can obtain from a list of participating banks through a letter of guarantee issued by QDB to the financing bank.”
About home loans and personal loans of Qatari citizens, QDB said that the Programme finances private companies’ staff payroll as per the Wage Protection system registry (WPS), as well as their various rental fees.
On the significance of the progamme for the micro, small and mid-sized entrepreises (MSMEs), which are struggling to restart their operations post-COVID-19 lockdown, the Bank said: “QDB launched the National Guarantee Programme – in collaboration with QCB, the Ministry of Finance, and various banks in the State – as part of the country’s QR75bn economic incentives package. By financing private enterprises’ employee wage bills and pay rental fees, the programme ensures business continuity despite any disruptions induced by the Coronavirus pandemic.
QDB further added: “The programme complements the various precautionary measures taken by Qatar’s wise leadership which include the exemption of food and medical goods from customs duties, the exemption from electricity and water fees for a number of sectors, and rent exemptions for SMEs and logistic areas for a designated period, among other measures.”