Bahrain opens bids for $265.3m Liquidity Support Fund

The fund, which offers credit facilities at an interest rate of 2.5%, will receive bids from 18 December, 2019

Bahrain opens bids for $265.3m Liquidity Support Fund
Bahrain News Agency
Bahrain opens bids for $265.3m Liquidity Support Fund

Bahrain’s recently established $265.3m (BD100m) Liquidity Support Fund will begin receiving bids from 18 December, 2019, in line with its mandate to support private sector companies to pay short term obligations, particularly related to paying suppliers and wages.

The fund will offer credit facilities at an interest rate of 2.5%, according to the state-run Bahrain News Agency.

The announcement follows the signing of four agreements between Bahrain’s Ministry of Finance and National Economy and the banking institutions contributing towards the fund, including the National Bank of Bahrain, the Bank of Bahrain and Kuwait, the Bahrain Islamic Bank, and the Bahrain Development Bank.

The fund aims to fulfil the directives of the kingdom’s Crown Prince, Deputy Supreme Commander, and First Deputy Prime Minister, HRH Prince Salman Bin Hamad Al Khalifa, who instructed the Ministry of Finance and National Economy to establish the Liquidity Support Fund in coordination with the Ministry of Industry, Commerce and Tourism, the Bahrain Chamber of Commerce and Industry, and the Labor Fund (Tamkeen).

Applications for large companies with an annual income above $8m (BD3m) will be received at the following branches of the National Bank of Bahrain: the main branch, Seef Mall branch, Atrium Complex branch, and the Istiqlal Highway branch.

Applications for small and medium enterprises (SMEs) with an annual income below $8m (BD3m) will be received at the following branches of the Bahrain Development Bank: Sitra branch, Riyadat branch, Diplomatic Area branch, and the Hidd Industrial branch.

The applications will be reviewed for eligibility and a credit evaluation of the company. Credit application requests for large companies are capped at $2.65m (BD1m), while SMEs can request for a maximum of $663,000 (BD250,000), with a loan period of up to three years.

Large companies must meet certain application critera, including holding an active commercial registration; carrying out commercial activities in Bahrain for five consecutive years; a minimum of 51% Bahraini ownership; financial statements for the last four financial years, including for the fiscal year 2018; positive financial solvency; and a positive gross profit margin for three of the past five years.

The application criteria to be met by SMEs include holding an active commercial registration; a minimum of 51% Bahraini ownership; commercial activities operated in Bahrain; no requests for reorganisation or liquidation according to the kingdom’s bankruptcy law; financial statements for the fiscal year 2018; and a positive gross profit margin for one of the past three years.

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