BD63m in business aid already covers bankruptcy concerns for Bahraini companies and factories

TDT | Manama

Email: mail@newsofbahrain.com

BD63 million of pandemic-era business support forms part of the safety net already in place for Bahraini companies and factories facing bankruptcy, the government has told MPs.

In a written reply to Parliament, it said it had reviewed an urgent request calling for state backing for commercial firms and local factories under threat of insolvency, but argued that support is already available through Labour Fund, Tamkeen, schemes, work with local banks and steps to update the law on reorganisation and bankruptcy.

The government said it backs the private sector as a partner in sustainable development and, through its agencies, works to clear hurdles facing Bahraini businesses and factories that support the economy and employ Bahrainis, provided they meet Tamkeen’s terms and requirements.

Industry

It said the support on offer spans economic sectors, including industry, and includes grants to help businesses buy machinery and equipment, access to finance, and funding support arranged with a number of local banks.

It added that Tamkeen’s programmes also provide training opportunities in the industrial sector, which it described as a priority area for support because of its role in growth and job creation for Bahrainis.

Tamkeen also engages with some distressed Bahraini companies that play a role in the Kingdom’s commercial and economic activity, particularly those employing Bahrainis, the reply said.

Aim

The aim is to review support options that fit each case, help firms settle their positions, restore business activity and protect Bahraini jobs.

As an example of intervention during a period of economic disruption, the government pointed to the financial package launched during the coronavirus pandemic to provide liquidity to the private sector and maintain business continuity.

It said Tamkeen introduced the ‘Business Continuity Support’ programme in April 2020, injecting more than BD63 million to support more than 22,000 establishments, with grants aimed at covering operational needs for businesses affected by the pandemic.

The government said it later launched an Economic Recovery Plan for the post-pandemic phase from 2021, and reintroduced support programmes linked to business establishment and economic growth, alongside measures aimed at supporting employment and career progression for citizens.

It added that the Central Bank of Bahrain has expressed readiness to work with creditor banks to encourage them to study financial pressures and put forward solutions to protect Bahraini companies threatened with bankruptcy.

Updates

The government also said it is examining updates to the Reorganisation and Bankruptcy Law, Law No. 22 of 2018, in co-operation with the central bank and banks, including bank proposals linked to the request raised in Parliament.

In closing, the government said the aim of the request had been met, while stressing it would continue working with Parliament within the relationship between the executive and legislative branches.