Bahrain-based small- and medium-sized enterprises (SMEs) will soon be served by a business division specifically geared to their needs at BankMuscat International according to a statement released this week by the bank.

The division will make a range of services available to SMEs, including letters of credit (L/Cs), and will be taking a fresh look at how lending decisions are made for smaller businesses.

Service provision

The SME banking division will provide several banking solutions to its clients in Bahrain including trade finance, investment and borrowing services.

Trade finance products will include L/Cs, bill discounting and trust receipts says the bank, which is also offering SMEs a range of lending products, including term loans and working capital loans.

Economic importance

BankMuscat says it is launching the new division because of the importance of the SME sector in Bahrain's economic development.

According to BankMuscat's acting general manager, Abbas Al Derazi, the bank "considers the SME segment as a very crucial and increasingly important component in the country's development."

New approach

Derazi also maintains that SMEs form "a unique segment that requires...customised solutions." In this respect BankMuscat says it is adopting a new approach to evaluating risk in its SME business.

The bank says that instead of concentrating on the risk associated with the segment, it will evaluate the current performance of developing businesses and calculate true funding and borrowing requirements by mutual consent.

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