Bank Muscat’s najahi product and services are encouraging micro and small businesses by addressing their fundamental challenges.
Micro and small businesses are playing an important role in diversifying the Sultanate’s economy and creating job opportunities for Omani youth. Bank Muscat, in line with its ‘Let’s Do More’ vision and commitment to partnering and promoting sustainable development efforts, was quick to identify the opportunities and challenges faced by this vital segment and went on to develop a suite of products and services aimed at helping them perform well.
Facilitating financial inclusion, the Bank Muscat najahi products and services are today making a vital difference in the good performance of micro and small businesses in Oman. Creating a positive impact on the community and the nation, najahi is helping them to overcome hurdles and chart successful ventures with proper planning, financial discipline and prudent management. Said Al Badai, DGM – branches, Bank Muscat talks to OER about the vision behind launching najahi and its offering. Excerpts from the interview
What was the idea behind launching najahi products and services?
Considering the focus on the SME segment in Oman, banks have been urged to play an important lead in providing financial services to this segment. This has been voiced by the Central Bank of Oman as well as the government. Bank Muscat, has thus taken the lead in providing financial services to this segment.
The Oman MSME (Micro, Small and Medium Enterprises) sector is composed of a large, heterogeneous segment. It is estimated that MSMEs account for around 15-17 per cent of Oman’s economic output. MSEs (micro and small enterprises) are a major sub-set of the SME segment. Often, MSE financial activity is not reported or registered, as a number of MSEs do not produce annual financial statements. Almost all MSEs have access to banking facilities and a majority operate through the personal accounts of their owners. Thus MSEs face challenges to access credit facilities from banks. Given the above factors, Bank Muscat decided to provide a distinct proposition for the MSE sub-segment.
Can you share the suite of products that is offered under najahi?
najahi has a suite of products covering deposits, loans and trade finance (LCs and Guarantees).
Under credit facilities there are:

1. najahi Flexi loan to support working capital, business expansion and other business needs;
2. najahi Business credit card
3. najahi Contractors loan to help complete contracted jobs
4. najahi Contractors bill discounting to get immediate funds after completing contracted jobs.
5. najahi POS receivables financing facility: Short tenor (ranging from one to six months) loans against point of sale (POS) collections with unique facility of daily installment repayments.

Under deposits, najahi current account is a value added current account that comes with a debit card facility and has several additional benefits such as branded cheque book, priority queuing at branches, free access to Maktabi Business Centres and online banking services.
The najahi business debit card offers a number of benefits (currently offered only with najahi current account) like a higher withdrawal limit to meet day-to-day cash requirements. najahi customers can also avail multiple debit cards on the same account allowing authorised persons to make transactions on behalf of the company. For trade finance products, currently only fully cash backed facilities are offered.
Other banks also have specific solutions for SMEs; what differentiates najahi from its competitors in the market?
Bank Muscat has further segmented the MSME segment and has set up a dedicated department under its retail banking Division to cater to the needs of the micro and small businesses. The products and services developed by this department are offered to customers under the brand name ‘najahi’.
Micro and small business segment customers typically have smaller managerial teams, virtually no audited financials and lower access to organised sector borrowing compared to medium sized enterprises. With this shaper focus on the micro and small business customers, the najahi proposition (products, sales and service) is tailor made to meet the requirements of this customer segment in a superior fashion.
SMEs usually complain about inadequate service; how are you ensuring that you provide best in class service?
As mentioned earlier, the najahi proposition (products, sales and service) is tailor made to meet the requirements of the micro and small segment. A dedicated department set up under the name of retail enterprises, focuses on aligning the bank’s processes, products and services to meet the special requirements identified for this customer segment. Hence, Bank Muscat is better placed to meet the needs of this customer segment
What are the main challenges faced by SMEs in Oman, and how does najahi address these concerns?
We will focus on the micro and small businesses in the context of najahi products and services. Research with small business customers conducted by Bank Muscat in collaboration with IFC highlights that MSE financial management and banking support requirements vary widely according to the size, age and type of business. The levels of financial sophistication and support needs vary significantly in degree between different sub-segments.
There are, however, some common threads which can be summarised
as follows:
Almost all MSEs have access to banking facilities and a majority operate through the personal accounts
Many MSEs do not produce annual financial statements
MSEs need quick credit decisions and loan processing
They need collateral-free small value loans and credit facilities.
They do not have access to long term funding for capital investment
They need ‘24 hour, one stop’ banking (via branches and remote delivery channels).
Preference for convenient branch locations offering quick service and extended opening hours.
Hassle-free access to short-term liquidity and working capital funding.
Keeping these in mind, the najahi proposition focuses on addressing the customer needs in the following manner.
Credit products have been developed on the following basis:
Removing the necessity of customers providing audited financial documents by using other substitutes for credit assessment
Collateral free credit
Large geographical footprint – products available through the vast branch network and supported by dedicated centers in each region
A dedicated department provides quick turnaround time, as well as continuously fine tunes the products and services to improve the offering
Deposit products have been developed introducing the business debit card and other facilities to cater to the special needs of this customer segment.
Further, Bank Muscat’s stat-of-the-art electronic channels (call centre, online banking, ATMs, CDMs, mobile banking) are available to the customers for a 24×7 access to their day to day banking needs.