Qatar’s QR75bn financial and economic incentives program is “very important and plays a key role in sustainability of businesses and avoiding a setback to the economy,” says Doha Bank CEO Dr R Seetharaman.
Aviation, hospitality, food and transportation are some of the priority sectors under the stimulus package, Seetharaman said in an interview with Gulf Times.
The government’s decision to inject QR10bn into the Qatari bourse is a “major step” that infused enormous amount of confidence in the market, he noted.
Asked whether the QR75bn economic stimulus will help the Qatari private sector manage through the critical phase of the Covid-19 situation, Seetharaman said, “The six-month grace period provided to the private sector for the repayment of their loans is a big relief to the struggling companies. Banks can benefit from the QCB’s (Qatar Central Bank) decision to bring down the repo rate to zero.
“The measures will also benefit small businesses and private sector’s cash flow management. The postponement of outstanding loan installments and interest on loans held by the affected sectors would certainly allow the affected organizations to recover from the losses incurred during these challenging times.”
Local banks have partnered with the Qatar Development Bank (QDB) for the National Response Guarantee Program (NRGP) announced by the State of Qatar. The program offers “guarantees” backed by the Ministry of Finance to the value of QR3bn.
Seetharaman noted that guarantee is for eligible sectors operating in private sector.
“This product has recognized the current liquidity issues faced by private sector so as to enable them to pay staff salaries, rental payment and ensuring business continuity,” he said.
On whether the Qatari private sector needs a special package to deal with the post-coronavirus phase, the Doha Bank CEO said the private sector in Qatar is keen to support the efforts of the State to face the consequences of Covid-19 pandemic.
“Likewise, the private sector would welcome any reforms from the Qatar Government to support them so they could enable the economy to move forward by resuming its normal activities gradually after the Covid-19 pandemic is over. I take this opportunity to thank the Qatar Government for its pro-active efforts to support the Qatar private sector,” Seetharaman said.
The small and medium-sized enterprise (SME) sector is a key driver of the State’s economic diversification, and a tool to promote the country’s industrial and productive potential in line with the Qatar National Vision 2030.
SMEs are the primary component of liberal economy and social stability, he said. SMEs not only contribute to output, fulfill social objectives, attract considerable foreign reserves into a country but also have a clear importance in providing employment; they are the backbone of the private sector all over the world, which drives the impact to a sustainable economy.
“So, it is very important to support SMEs time to time, depending upon the market situation,” Seetharaman said.