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Exec from Dubai's Mashreq Bank on how lenders assess GCC contractors

EXCLUSIVE: Mohammad Khader Al Shouli, SVP and head of contracting finance at Mashreq Bank, offers top tips

An exec from Dubai's Mashreq shares top tips to secure project finance.
An exec from Dubai's Mashreq shares top tips to secure project finance.

How can contracting companies improve their financial credibility with lenders? Senior vice president and head of contracting finance at Dubai's Mashreq Bank, Mohammad Khader Al Shouli, told Construction Week that builders must begin with creating a proper contracts department, and picking projects that the contractor can confidently deliver.

“There are features that are very important to us when we are looking at a contractor,” Al Shouli said during an episode of Construction Week Viewpoint, Construction Week’s weekly podcast series published on Soundcloud and iTunes.

“We look at a company in terms of whether they have a clear clarity of their risk matrixes; which are the zones that they will operate in; what their contingency plans are and how do they mitigate them; and whether they have a filtering system that allows a project to be approved or not.”

A contracts department is important, according to the Mashreq exec, because “you need people who really understand contracts and their terms”, in addition to professionals from finance and commercial teams.

A contractor’s ability to “build a backlog is not what drives” financiers, he explained, despite conceding that such an approach could look “nicer from a numbers point of view”.

Headquartered in Dubai, Mashreq Bank’s contracting finance business offers options  such as advance payment, retention money guarantees, and tender bonds.

When asked to explain how Mashreq, as a lender, works with contractors, Al Shouli said: “It is about the quality of the projects that you choose and having the discipline to [deliver] that.”

Mohammad’s full podcast with will be made available at midday on Monday, 20 May, 2019 through Construction Week’s SoundCloud and iTunes accounts. Be sure to subscribe to stay up to date with all podcasts from CW Viewpoint.

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Construction Week - Issue 754
Nov 23, 2019