MUSCAT // Oman is hoping to stoke an entrepreneurial spirit amid its growing contingent of jobless youths.
A 70 million Omani rials (Dh668m) government-backed fund for the creation of small and medium enterprises (SMEs), first launched in February, will now be aimed at cutting down the number of jobseekers at a time when the economy is sluggish amid low oil prices.
Last week at a press conference in Muscat, the state-owned Oman Development Bank outlined how it would support fledgling entrepreneurs. Incentives include a soft loan at 2 per cent interest per year. Successful applicants are exempted from monthly repayments for the first 12 months. In the second year, they are required to pay only half the monthly repayment amount. Only from the third year onwards would they need to make full monthly repayments.
Jobseekers said the initiative would provide fresh hope for people who have been unable to find work for a long time.
“I have been looking for a position for two years and four months now since I graduated. The loan would help me become independent. I am sure I would make it successful as a businessman because I know how hard it is to wait for a job,” said Fauz Al Fazari, a 26-year old electronics engineering graduate.
A third of the 2.5 million Omani nationals are aged between 15 and 29, with about 26 per cent under the age of 15, according to official statistics. Oman’s ministry of manpower says it has over 54,000 registered jobseekers. The unemployment rate was 18 per cent last year, according to the ILO, with large numbers of new graduates having entered the job market over the past four years. The drop in oil prices from a peak of about US$120 per barrel in 2014 to about $50 per barrel now has also badly dented the government’s ability to create jobs.
In 2013, the government launched a similar sized fund to help new and existing entrepreneurs, but without any emphasis on those who are unemployed.
Owners of existing SMEs entrepreneurs say that at present there is a greater urgency to help young people to get on to the entrepreneurship path.
“This time is different. Then we had only 55 per cent of the current unemployment figure we have now. In the last four years the number of jobseekers have almost doubled. It makes a lot of sense to reduce reliance on employment and get young people self-employed,” said Suleiman Al Najjar, owner of Reliance Tours.
Other SME owners are concerned that fresh graduates may need more than just cash to be successful.
“Why should the unemployed get preferences in SME funding? They should be competent like any other SME fund applicants. If they have to do it than they must filter out the jobseekers in terms of their academic qualifications. Imagine a school dropout with no certificate gets his hands on a lot of money. He would squander it because he has limited education and would not be able to handle the financial or the marketing part of the business,” said Ghaliya Al Hinai, the proprietor of Al Habtoor Catering.
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