Mamun expanding investor access to SME funding

Oman-based Mamun is ramping up access for investors seeking to earn higher returns within the GCC region with its Shariah compliant platform focused on funding for SME trade contracts, CEO and Co-Founder Saleh Al Tamami shared with IFN Investor.

For starters, Mamun has begun the application process for domestic operational licenses in Bahrain and the UAE – anticipating that its new offices in these two GCC nations can be launched by year end. Mamun is also introducing a new category to woo institutional investors to its funding platform.

Unlike the current US$100 entry point aimed at drawing retail investors, the new category will have a US$500,000 minimum subscription together with other criteria that would meet the appetite of institutions, explained Saleh.

“We drew up this mandate to cater to the strong interest from established private credit providers from the Americas and Europe, who are making significant investments in the Middle East and the GCC region. Such activity has also attracted the attention of GCC-based family offices and investment houses.”

Proceeding to tackle progressively larger ticket sizes has been a natural progression for Mamun since its 2021 establishment. The firm was set up to make it easier for SMEs to apply and obtain for financing from banking outfits.

Achieving success with its embedded finance middleware soon revealed a critical lack in terms of the user side of Mamun’s digital platform – as the small pool of financiers could not keep pace with funding demand. This led Mamun to pivot its service in 2023, focusing on attracting investors with a crowdfunding model.

This transition enabled Mamun to better match SME financing requirements with investor funding, resulting in better efficiency in deploying capital while managing practical risk-return ratios. “We found the sweet spot to be contracts of three to nine months.”

The investments tap directly into SME trade contracts, usually cross-border, as Oman is a major entry point for goods into the GCC region. Mamun structures these opportunities mainly as Murabahah asset-backed contracts – where trade goods are purchased, then sold to the SMEs at cost plus markup over a number of instalments – as Oman does not practise the Tawarruq principle.

In running this SME crowdfunding service, Mamun has managed to attract retail investors beyond Oman – with some coming as far as New Zealand, apart from the Americas and Europe. The expansion into Bahrain and the UAE is to further raise the firm’s profile as it tackles even larger investing tickets.