Tuesday, February 7, 2023

The top bank in Qatar that aids startups get off the ground

The lack of funding options and loan facilities is the most disheartening issue for Qatari startups. This article gives a quick overview of Qatar’s banking sector and an outline of the services provided by banks in Qatar.

As the fourth revolution hits the industrial grounds hard, young entrepreneurs seek out ways to join the fray. On this path to prosperity, however, every traveller will face the same stumbling block. And that is a lack of financial support and leverage. Through this brief piece of writing, we highlight the Qatari banks and their assistance initiatives that aid Qatari startups regarding the matter at hand. The aim is to educate and help Qatari entrepreneurs select the best bank in Qatar as per their specific financial and business needs.

An overview of the Qatari banking sector

Undoubtedly, Banks play a pivotal role in promoting economic growth in Qatar by providing loans and other financial assistance to entrepreneurs and their startups. According to the Ministry of Foreign Affairs website, Qatar has 20 commercial banks: 12 national banks (4 Islamic) and eight foreign banks. They have 223 local branches, all of which are regulated by the Qatar Central Bank. 

Despite having a lower market volume than other nations, Qatar’s banking system is booming at a remarkable rate. Lately, international rating agencies and the Qatar Stock Exchange have praised the banks’ financial soundness, citing their high liquidity level and excellent earnings. The Qatari banking industry expanded at a phenomenal rate of 3.5 per cent, owing to the country’s strong economic activity. As a result, retail banks often develop innovative and distinctive programs to help start-ups in Qatar and stimulate economic activity.

The criteria to determine the best bank in Qatar

We are about to begin our extensive discussion on the various banks in Qatar working towards achieving a flourishing startup ecosystem. However, it is worthwhile to keep in mind what a bank in Qatar should offer to top our list. The to bank in Qatar should:

  • Provide financial assistance for the startup’s initial outlay.
  • Act as a bridge between startups and potential investors.
  • Provide interest free or low-interest loans with accessible payback periods and terms.
  • Provide other miscellaneous supportive services.

Resultantly, the best Qatari bank should offer a one-stop solution to all financial problems of Qatari entrepreneurs.

Image Source: QDB

Qatar Development Bank

The first bank in Qatar on our list was founded for the sole purpose of encouraging industrial and economic prosperity in the country.

Since its inception in 1997, the bank has unwaveringly increased its capital from QAR 200 Million to QAR 12 billion.

Currently, the bank boasts 270 employees and full-fledged development services.

QDB offers a variety of initiatives and services, including:

ITHMAR (SEED FU​NDING)​

Ithmar is an Islamic Shari’a-compliant equity finance scheme. The program is a comprehensive and unified strategy that gives entrepreneurs the funding they need to start a business in Qatar. QBD provides 90% of the funding, and the entrepreneur invests 10%. And the maximum investment limit is 900 thousand. The initiative seeks to foster a new generation of Qatari entrepreneurs by providing support and equity money to those who want to establish a business in Qatar.

ISTITHMAR (SME EQUITY)

The SME EQUITY finance program is the country’s first of its type. Its goal is to help diversify the economy by giving growth capital to Qatari entrepreneurs and investing in innovative startups and promising and sustainable organizations. The scheme aims to cultivate innovation and stimulate the development of new ventures in Qatar to construct a knowledge-based economy. The total size of the investment program is QAR 365 million, of which 20% will be devoted to innovative startups, and 80% is for medium-sized firms.

DIRECT LENDING

QDB Direct Lending is a straightforward and cost-effective way to fund your new business. Manufacturing, education, healthcare, services, agriculture, livestock, and fisheries are among the industries to which the lending will be provided. The eligibility criteria and  ​lending terms depend upon the industry in which your startup operates.

Qatar International Islamic Bank

Qatar International Islamic Bank - QatarsTalk.com
Image Source: QIIB

QIIB is one of Qatar’s major Islamic international banks, having been established in 1991.

International rating agencies laud the bank’s financial health and future, generating enormous profits year after year.

Remarkably, its asset stood at a value of QAR 50.3 billion in 2018.

The fantastic facilities startups can avail through this bank are:

Ijara

Our second-best bank in Qatar offers a great alternative for startups that cannot afford to make on-the-spot cash payments for their assets. Ijara is a form of Islamic financing in which the bank purchases an item for the client and then leases it to the client on a cost-plus profit basis. However, the ownership of the asset will be transferred to the entrepreneur at the end of the lease term.

Murabahah

This facility is similar to Ijarah, but there is no lease agreement between the bank and the entrepreneur. Instead, the bank provides a startup with the funds required to purchase the asset. Then, the total amount plus a profit is repaid over a period consistent with the startup’s source of income.

Project Finance

If you have a viable project idea but lack proper funding, QIIB’s project finance facility is a wonderful option. At QIIB, entrepreneurs benefit from substantial support of experienced staff, as well as creative financing solutions and cash to satisfy all of their financing needs,

Doha Bank

Doha Bank - QatarsTalk.com
Image Source: Doha Bank

Founded in 1979, Doha Bank is one of the largest banks in Qatar today. To date, it has won numerous awards & honours and has total assets worth QAR 90,367 million (as of 2018), and it unwaveringly reports huge profits annually.

Apart from its four main banking categories, it has devoted an exclusive section for SME banking which includes solutions for startups and new ventures as well.

Its services include:

TERM LOANS

This facility enables startup and small business owners to acquire fixed assets such as machinery, equipment, furniture, etc.

VEHICLE/ EQUIPMENT LOANS

Entrepreneurs can use this service to purchase an asset that can be registered with the traffic department.

All in all, there is always a solution to every difficulty. Hence, innovators should never be discouraged by a lack of funding alternatives since there will always be a bank in Qatar to meet your unique requirements. The trick is to conduct comprehensive research and stay current on the newest bank-sponsored initiatives.


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To report any issue or error in the story, please email us editor [at] qatarstalk [dot] com.

Team QT
Team QThttp://www.qatarstalk.com
Staff writer at QatarsTalk.com

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