Qatar Development Bank (QDB) won the Excellence in Crisis: Client Services Middle East accolade at the virtual Middle East & North Africa (MENA) Banking Excellence Awards 2022, held on 23 June, for the National Response Guarantee Program (NRGP) they administered in response to Covid-19 under the auspices of the government to help the private sector (i) survive, (ii) revive & (iii) thrive after the pandemic.
The Emir of Qatar provided financial and economic incentives amounting to QR75 billion Qatari Riyals (US$20.6bn) to help those in the private sector impacted by the global economic chaos unleashed by Covid-19. The relief program was designed to support firms working capital, including salaries (furlough) and rent.
Qatar Development Bank (QDB) was assigned to launch and administer the Qatari National Response Guarantee Program (NRGP) in cooperation with the Ministry of Finance and the Ministry of Commerce and Industry, and coordinate all banks operating in the country, which were allocated guarantees by QDB at an amount of QR5 billion (US$1.37bn) to disseminate funds down to local businesses that needed it the most.
NRGP ran from April 2020 until September 2021 with four extensions to cope with the evolving situation and sector specific assistance for hard hit areas like construction. It supported:
over 4,743 companies,
covering the salaries of over 425,000 employees
equivalent to 35% of the total workforce.
The loan guarantees were structured with the principal fully covered (100% guarantee) and the interest during the 1st and 2nd year grace period paid by the government through QDB, while the 3rd and 4th years come with a subsidized interest rate paid by companies.
QDB ran more than 20 webinars, workshops, and Q&A sessions for participating banks to brief them on the program. The bank also set up a dedicated online portal (B2B) with banks and customer hotline to get feedback and resolve any bottlenecks during the fast rollout of the program.
QDB’s structured its approach to help firms survive the immediate Covid-19 crisis, then revive and thrive after the pandemic with new skills learnt during the interlude.
(i) Survive: The survive aspect of the program was delivered in multiple tranches to help small-to-medium sized enterprises (SMEs) quickly get the practical help they needed. QDB itself:
Delayed loan repayments: for SMEs without interest fees or charges for nine months. This also included a nine-month exemption of rental fees for QBIC (one of QDB subsidiaries) which is a state-of-the-art business incubation center that helps entrepreneurs start or grow their business.
Special exemptions for tenants: were granted for various QDB owned and operated real estate units – namely Al Furjan Markets, which offer SMEs spaces in commercial complexes, as well as the Jahiz1 and Jahiz2 factory sites, which allow owners with innovative industrial, or food and beverage projects, to lease ready-to-operate manufacturing facilities.
Situation Room & other help: was unveiled to help manage supply chain issues for SMEs and provide virtual training for entrepreneurs to help them navigate this uncharted environment. A hackathon was also held to crowdsource and attract innovative solutions in response to the crisis, and a comprehensive accessible guide was produced by QDB.
(ii) Revive: training was essential to ensure the long-lasting sustainability of SMEs and the private sector, so this aspect of the program offered access to specialized advisory services and a financing scheme to overcome business challenges. The idea was to turn a crisis into an opportunity by using the downtime to retrain for growth and development.
(iii) Thrive: this phase supported reinvention by encouraging SMEs to digitalize and adopt future industry 4.0 norms through catered advisory and financing products.
A subsequent survey showed that 77% of beneficiaries from the private sector would have gone out of business without the NRPG. The revive and thrive aspects of the program will hopefully ensure strong growth in the future as the bounce back begins.