Fostering enterprise
A number of agencies are in place to help aspiring entrepreneurs. What is needed is a customised and coordinated approach


Ask any young Omani what the biggest roadblock is to becoming an entrepreneur and chances are that nine out of ten will cite the lack of finance as a major constraint. Abdullah al Jufaili, Director, Intilaaqah, however, thinks otherwise. “Most of them lack the motivation and drive to start a business but they are quick to pin the blame on a lack of cash,” he says. The fact is there are multiple government, quasi government and private organisations that are ready to lend a helping hand to aspiring entrepreneurs. These organsations render the entire spectrum of aid needed by a start up from finance, training to space.

Financing options
The Sanad programme, for example, has a Sanad fund which loans the requisite finance and guidance for self-employment projects. Each entrepreneur can avail themselves of a maximum amount of RO5,000 at a meager interest of two per cent per annum. Oman Development Bank gives soft loans upto one million rials to a single borrower at a three per cent per annumn interest rate. So, given the finance options in the market, it is difficult to buy the lack of finance argument.

There are other concerns that curb entrepreneurship in Oman. Traditionally, there has been little tolerance for failure in businesses within the region. On an average only one in ten start-ups are successful internationally and it is important for people to realise that the equation would be the same for Oman. Apart from acceptance of failure it is essential to ensure a soft landing for a start-up and an entrepreneur. The country’s legal system can help in this effort by simplifying the process of establishing and liquidating a business. Given this structure a small and medium entrepreneur can take the learnings from his business and move on.

The absence of a venture capital (angel investor) culture in the Gulf has been a major reason why a number of brilliant ideas have perished on the drawing board. The involvement of a venture capitalist goes a long way in ensuring a soft landing as he shoulders part of the financial burden. Secondly, the entrepreneur does not need to repay the venture capitalist his seed money if the venture fails, unlike a loan which needs to be paid back irrespective of the fate of a business.

Seminal change
Sharakah or the (Fund for Development of Youth Projects) has introduced an equity funding model, whereby, instead of giving out loans it takes an equity stake in projects. Says Malak Ahmed Al-Shaibani, general manager, Sharakah, “We take a risk as an angel investor as our objective is to assist entrepreneurs till their business stabilises at which point we exit the business at a profit either by listing or a stake sale.” The profit made on the venture goes back into the fund. Sharakah is looking at investing in three to four projects in 2008. On average the fund gets five to six proposals soliciting help every month.

The growing popularity of Sharakah is not surprising as it is bringing in a new sensibility to entrepreneurship. In a family oriented culture like Oman most people are used to raising money from their family members as this gives them a higher comfort level. An angel investor or a venture capitalist invariable comes in demanding transparency, record keeping, process orientation and discipline. While these may be acceptable to some for others it requires a leap of faith.

A lack of innovative ideas is another reason why a number of initiatives fail in Oman. Says Jufaili, “We usually find people copying a successful idea, an entrepreneur on the contrary needs to bring in a novel idea or service to succeed.” The opening of new sectors such as tourism, real estate, telecom and IT is opening up numerous avenues for entrepreneurs. Since most of these businesses are knowledge based ones and not asset driven they suit the profile of educated young Omanis.

The TKM (The Knowledge Mine) – Ernst & Young Big Business Idea Competition (BBIC) is an initiative which aims to promote entrepreneurship by giving people a chance to develop innovative business idea’s. Says Dave Pender, Advisor, Public Establishment for Industrial Estates (PEIE), “We are passionate about helping young people take control of their future, the competition is designed specifically to stimulate enterprise, innovation and creative thinking in Oman.” The winner of the competition and the runners up receive RO5,000 as financial assistance and a 12-month rent free office accommodation at the TKM business incubator programme based at Knowledge Oasis.

Most entrepreneurs tend to neglect the planning process. Says Jufaili, “People need to realise that in the changed environment they need to put together some sort of plan before starting off.” Intilaaqah, a Shell Development Oman’s social investment programme has been trying to help entrepreneurs tide over such weaknesses. The programme conducts different kinds of programmes for Omani nationals in the 18-32 age bracket.

Mentoring talent
Intilaaqah runs three kinds of training courses – the first one is a one-day workshop called ‘Bright Ideas,’ which tries to stimulate entrepreneurship ideas within people. The second is a ‘Become a Successful Owner Manager’ course. This two-three day programme gives aspirants a grounding in HR, marketing, finance, cash flow and research. Finally, there is a three-month ‘Business Ownership and Management Training Programme.’ These courses are customised to suit the individual needs of a particular batch. The Intilaaqah programme has trained 5,500 nationals till date. According to estimates 37 per cent of the beneficiaries of the programme were running their own business at the end of 2006. A remarkably high conversion rate.

Says Shaibani, “There are a number of on-going initiatives, but they need to become more relevant by providing mentoring services and technical skills.” A Royal Decree has recently created a new Directorate for SME’s to oversee the various entrepreneurship programmes in the sultanate. “There is a need to increase the networking opportunities for budding entrepreneurs,” says Jufaili. A number of agencies such Sanad, Sharakah, Intilaaqah etc are working closely to promote this cause.

A conducive external environment may go some way in promoting enterprise but the onus rests largely on the shoulders of the aspiring entrepreneurs themselves. Successful entrepreneurs share a few common traits. For example most of them are visionaries who are willing to examine all existing possibilities. Patience and unflinching commitment to their cause sees them through the ups and downs of enterprise and finally they are aware of their shortcomings and are ready to seek help to tide them over.

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