GroFin is a pioneering development financer specialised in financing and supporting small and growing businesses, leveraging patient capital and business support. Excerpts of the interview with Sami Al Hassan, General Manager of GroFin Oman.
Could you give us a brief on GroFin?
Established in 2000, GroFin is supported by 25 plus leading international investors, development partners, corporate and family foundations with over $400mn in committed capital.
GroFin Oman, is the fund manager for Nomou Oman Fund which was established by Shell in 2007 as Intilaqaah Enterprise Fund (IEF) through a gift to the nation. It was rebranded to ‘Nomou Oman Fund’ in 2013, and is part of the Nomou programme co-established by GroFin and Shell Foundation (an independent charity). The initiative aims to catalyse the SME sector as a major driver of sustainable job creation and economic growth in the MENA region.
GroFin focuses on growth finance and has established a local team on the ground. GroFin deploys proven business model that delivers unique integrated solutions of patient risk capital and end-to-end business support to start-ups, small, and growing businesses.
Many banks have initiated funding programmes for SMEs. What makes GroFin different from these programmes? Why would a small enterprise trust GroFin over a bank?
Until recently, banks were one of the least likely resorts for entrepreneurial funding and were reluctant to deal with the SME sector due to the high risk nature of the transactions. The sector was largely under served by traditional finance sources like banks and private equity firms and these business owners had very limited access to funding. However, this has changed recently with strong governmental support and promotion of the vital sector.
For GroFin, a specialist in small and growing businesses, our extensive expertise and proven track record of over 15 years in this industry, our focus from the outset was to serve the bottom of the SME pyramid – businesses too large for microfinance, too risky for traditional lenders and too small for private equity.
Nomou Oman Fund follows the GroFin model of integrating risk finance with value adding, business support to empower entrepreneurs by sharing skills and transferring business knowledge, while assisting them to achieve success and socioeconomic impact. Clients approach GroFin for several reasons apart from the access to funding. They recognise the need for business support services such as access to markets and supply chains as well.
What kind of support and services do you provide the SMEs with?
GroFin supports locally owned and managed businesses across a range of sectors and business stages including start-ups, expansions, buying of businesses, management buy-outs and franchises. GroFin offers businesses with many funding options such as;
Funding of RO50,000 to RO750,000
Medium term loans (3 to 7 years)
Moratoriums of up to 6 months if warranted by the business model
Funding of commercial construction, equipment, vehicles and working capital
GroFin assesses applications based on its unique Viability Model. The criteria used in our viability assessment are but not limited to;
Track record evidenced by performance and/or expertise in industry
Commitment to the business, significant own contribution (>30 per cent)
Growth oriented business approach
Committed to professionalise the business and follow good governance practices
External security or sufficient risk mitigating factors
GroFin focusses on high impact and job creation sectors including healthcare, education, energy, food and agri-business, key services, entrepreneurial enterprises. Companies in all stages of the business life cycle are considered whether young (<2 years), growing (2-5 years) or mature (>5 years).
Tell us about your goals. How far have you achieved your goals and how far do you still have to go?
Some of the achievements made by Nomou Oman Fund during the past 8 years of operations include; 90 local start-ups and growing businesses supported, 30 investments in oil and gas, manufacturing, education, services, wholesale and retail, and technology sectors, 168 total jobs created for women, and an Omanisation rate of 32 per cent in the fund’s portfolio which is above the market standards, a total of 879 jobs sustained and created, and a total of 5662 benefited from the fund directly and indirectly and six successful exits.
Our 10-year plan or goal focuses on sustaining 2404 jobs, 900 entrepreneurs receiving business support from Nomou Oman Fund, gain a minimum of 10 per cent year-on-year turnover growth, allocating 20 per cent of the Fund’s portfolio to women, having 99 SME investments over various targeted sectors and reaching a 40 per cent Omanisation rate within the Fund’s portfolio.
What are your thoughts about Oman’s SME sector?
It is a growing sector, receiving unlimited support from the government, with a clear goal to make it one of the leading sectors. It is also a key contributor to the economic growth of the country, not to mention a source for job creation for Omanis.