Gulf Times | May 06, 2020

“The QCB is actively working on developing strategies that will allow sector players to benefit easily and swiftly from the many fintech initiatives and products that are currently on the horizon,” says Sheikh Abdulla.

The Qatar Central Bank’s second strategic plan involves setting up policies that encourage the deepening of venture capital financing and ensure the development of SMEs, including start-ups, according to HE the QCB Governor Sheikh Abdulla bin Saoud al-Thani.

Another focused strategy for SMEs is being monitored through the Qatar Development Bank (QDB), which has developed several innovative programmes to provide short-, medium- and long-term capital to SMEs, he told the Oxford Business Group.

In order to provide a national-level, comprehensive strategy for the sector, a clear definition of SMEs was provided and measures were undertaken to reduce barriers to bank lending for these entities.
“Furthermore, in co-ordination with the QDB, we are in the process of designing other supervisory initiatives to support financing for SMEs,” Sheikh Abdulla said in response to how the QCB can increase the credit access and overall economic share of small and medium-sized enterprises.

He said project financing played a significant role in accomplishing sustainable asset growth for the banking sector. In Qatar and the wider region, it is mainly focused on sectors like power, oil and gas, petrochemicals, infrastructure and ICT.

Recent trends show that banks are constantly improving their expertise in this regard. The increased presence of their branches and subsidiaries across the globe – and particularly in the region – enables banks with a global reach to find alternative sources of stable funds with which to finance long- and medium-term projects, he told the OBG.

Banks are also driving innovative financing solutions and increasing access to capital to meet financing requirements, irrespective of a given project’s size and complexity.

Moreover, positive trends in energy prices, an expected fiscal surplus in 2019 and an increase in the current account surplus provide the banking sector with an operating environment conducive to funding such projects.
As projected in the 2019 budget, the government’s focus on developing new housing areas for nationals; enhancing food security; and establishing infrastructure and facilities in free zones, special economic zones, and industrial and logistics zones is also expected to provide further financing opportunities for the banking sector.

On the QCB’s standpoint on the sector’s adoption of blockchain solutions and other emergent financial technology (fintech), he said, “The QCB is actively working on developing strategies that will allow sector players to benefit easily and swiftly from the many fintech initiatives and products that are currently on the horizon. We are formulating the QCB’s approach to fintech by taking lessons from a number of major global initiatives in this regard.

“Our approach involves a careful and sensitive review of the impact and risks that the deployment of emerging technologies would have on the financial sector itself, while accommodating the adoption of modern tools. In that sense, we are designing those functions and frameworks that will be able to properly identify, oversee, regulate and accept new entrants into the financial sector.”

Sheikh Abdulla said, “Blockchain technology is now well known worldwide. It can be beneficial for payment transactions, back-office operations, risk management and even streamlining transaction reporting and record management. Understanding the possibilities of its development and the effects it can have across a sector, QCB is exploring the use of blockchain within the existing regulations that help forge a relationship between a regulated entity and its regulator.”

Sheikh Abdulla’s interview has been published in Oxford Business Group’s The Report: Qatar 2020.

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