United NationsDepartment of Economic and Social Affairs Sustainable Development

National Response Guarantee Program (NRGP)

Qatar Development Bank (
Government
)
    Description
    Intro

    In implementation of the directives of His Highness the Amir Sheikh Tamim bin Hamad Al Thani to support and provide financial and economic incentives amounting to QR 75bn to the private sector, Qatar Development Bank (QDB) , in cooperation with the Ministry of Finance and the Qatar Central Bank (QCB) and all banks operating in the country, launched the National Response Guarantee Program (NRGP) that provides guarantees to local banks for loans offered to the affected private companies in response to the implications of the spread of the Coronavirus (Covid-19). The loan guarantees are structured with the principal fully covered (100% guarantee) and the interest during the 1st year grace period paid by Government through QDB; while the 2nd and 3rd years with a subsidized interest rate paid by companies. The NRGP aims to support working capital including salaries and rent of companies in the private sector. QDB manages and issues the guarantees for this program; while banks operating in the country grants the financing on the basis of a guarantee from the QDB.

    Description

    The Covid-19 outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people. But it is also having a growing impact on the global and Qatar economy. Large-scale quarantines, travel restrictions, and social-distancing measures have driven a sharp fall in consumer and business spending. During this situation, most consumers stayed home, some businesses lost revenue and some employers implemented streamlining measures such as laying off workers, among others. Qatar Development Bank launched the National Guarantee Program – in collaboration with Qatar Central Bank, the Ministry of Finance, and various banks in the State – as part of the country's QAR 75bn economic incentives package. By financing private enterprises’ employee wage bills and pay rental fees, the program ensures business continuity despite any disruptions induced by the Coronavirus pandemic. Since its launch, the program has been playing a pivotal role in reducing the burdens of private sector companies and helping them overcome various challenges. To date, the program has issued guarantees to approx. 4,000 companies. The program complements the various precautionary measures taken by Qatar’s wise leadership which include the exemption of food and medical goods from customs duties, the exemption from electricity and water fees for a number of sectors, and rent exemptions for SMEs and logistic areas for a designated period, among other measures.

    Contribution to SDG Implementation

    The National Response program supported over 4,000 companies, and by doing so covered the salaries and wages of over 300k employees. Considering the size of the Qatar labor population is about 2M, this program covered approximately 15% of the labor force till date. Below are the key numbers of the program: Total amount guaranteed – QAR 3.112B Total companies supported – 4,029 Total employees supported – 319,849

    Implementation methodologies

    In 2020, the Coronavirus pandemic took the entire world and its economies by surprise, making it an exceptionally challenging period for entrepreneurs worldwide. As part of Qatar's national response to the pandemic, there has been full cooperation among various government agencies to provide integrated support packages to private sector companies With is in mind, an agile strategy was put in place at QDB to address three areas of focus for entrepreneurs: Surviving the pandemic, Reviving their businesses amid ongoing challenges, and Thriving in the new economy. The Survive Program was delivered in multiple tranches for the SMEs to ensure a practical and necessary assistance to the private sector is implemented in the time of need. This program was one of the fastest and most far reaching legislative / financial instruments the was delivered to the public from design to implementation. 1. Our first initiative was the delay of 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 a state-of-the-art business incubation center that helps entrepreneurs start or grow their business. 2. Additionally, special exemptions for tenants for various QDB owned and operated real estate units namely Al Furjan Markets– which offer SMEs spaces in commercial complexes – as well as Jahiz 1, and Jahiz 2 factories – which grant SME owners with innovative industrial and F&B projects the opportunity to lease ready-to-operate manufacturing facilities 3. In April 2020, We then launched the National Guarantee Program as part of the country's QAR 75 billion economic incentives package. o The program ensures that companies can finance their employee wage bills and pay rental fees The original stimulus package of the National Guarantee Program – which amounted to QAR 3bn – has recently been increased by an additional QAR 2bn, bringing the ceiling of the program to QAR 5bn. In addition to raising its ceiling, the program has been extended till mid-2021. Since its launch, the program has been playing a pivotal role in reducing the burdens of private sector companies and helping them overcome various challenges. To date, the program has issued guarantees to more than 4000 companies. 4. The entire suite of virtual consultation services and training for SMEs and entrepreneurs to help them better navigate this uncharted business environment This included relaunching our Situation Room, which deals with various aspects of the crisis, such as managing supply chain disruptions for SMEs, as well as providing the necessary technical support to help SMEs ensure business continuity and corporate productivity during these challenging times 5. We consider SMEs and entrepreneurs to be our trusted partners and we believe in their creative potential as well as their collective experiences. This inspired us to launch the Covid-19 Hackathon o This unique initiative is designed to source the collective intelligence of the entrepreneurship ecosystem in Qatar, in order to help develop innovative solutions to address the pandemic o The Hackathon has garnered over 1,500 applications and the winners are currently going through the prototyping stage for their proposed solutions. 6. And finally, we have also issued a special comprehensive guide for SMEs on how to deal with the crisis To ensure long lasting sustainability of our SMEs and private sector, the Revive program offered them the access to specialized advisory services and financing scheme to overcome business challenges while turning crises into opportunities and a platform for growth and development Thrive – The thrive phase supports SMEs to reinvent and overcome disruptions by encouraging SMEs to digitalize and adopt industry 4.0 through catered advisory and financing products. What's important to note here is that our COVID-19 response measures, was echoed by the governments objectives were to • Ensure SMEs and entrepreneurs are aware of the importance of business continuity and resilience • Help them acquire the knowledge, skills, and tools they need to tackle any existing or potential challenges and disruptions in the future • Provide them with all the support they need during challenging times and disruptive scenarios, so that they can focus on their core business activities and continue to innovate and play an important role in the private sector, as well as the overall economy in Qatar

    Results

    Value of impact on GDP – QAR 3.9B % impact on total GDP – 0.53% Based on survey, 67% of private sector companies should have closed or gone out of business without NRGP

    Factors and Constraints

    A dedicated internal working team worked round the clock to ensure the team remained focused and delivered during the extremely tight timeframe and challenging circumstances. Our CEO chaired daily meetings (some more than once a day), to provide leadership and direction. All our stakeholders which included ministries, banks and other regulatory bodies were continuously briefed on the progress and the decisions required by them for the lasting success of the program. Below is a snippet on how we reached out to our stakeholders and customers: • 20+ webinars, workshops and Q&A sessions for participating banks. • Dedicated online portal and hotline to receive feedback and resolve application’s bottleneck

    Sustainability and replicability

    Not applicable

    COVID-19 Impact

    Upon the directives of HH the Amir Sheikh Tamim bin Hamad Al -Thani, to support the economic and financial sector within the framework of the precautionary measures to combat the spread of the coronavirus (COVID-19), and HH the Amir's directives to support and provide financial and economic incentives, amounting to QR 75 billion for the private sector, HE the Prime Minister and Minister of Interior Sheikh Khalid bin Khalifa bin Abdulaziz Al -Thani, directed to allocate guarantees to local banks at an amount of QR 5 billion. The program is a 100% guarantee scheme of the Government of Qatar to help mitigate Covid-19 impacts by relieving the most critical short-term payments private sector employers will face as it includes Staff payroll-Salaries and Rental fees.

    N/A
    N/A
    False
    This initiative does not yet fulfil the SMART criteria.
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    Timeline
    05 April 2020 (start date)
    31 December 2021 (date of completion)
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    SDGs
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    Countries
    Qatar
    Qatar
    Contact Information

    Abdulrahman, Executive Director Strategy & Business Development