Oman's Central Bank promotes lending to SMEs
Oman's Central Bank promotes lending to SMEsNew Delhi, Apr 25 (KNN) Oman's Central Bank plans to issue rules to boost lending to small and medium-sized enterprises (SMEs) in a new move to help bring unemployment down in the Sultanate. The example can be followed by countries like India.
“The bankers will appreciate that growth of SMEs is critical to alleviating the unemployment problem in Oman. I, therefore, urge the banking community to gear up their infrastructure and tweak their policies to accelerate credit flow to SME sector in line with the government policy,” Executive President Hamood Sangour al-Zadjali said in a press release.
The government's economic policy aims to support smaller firms for tackling unemployment in Oman, estimated at more than 24 per cent by the International Monetary Fund.
However bank lending growth in Oman hit a 22-month low of 10.9 per cent in February, Central Bank of Oman (CBO) data showed.
"The CBO will issue appropriate regulations as and when formal communication is received in this regard from the government," Zadjali added.
Oman's consultative Shura Council approved in February a much higher minimum wage and curbs on foreign labour to prevent a repeat of 2011 protests against joblessness.
Expatriates, mostly from south or south east Asia, make up about 39 per cent of Oman's population and mainly work in the oil, construction and services industries, according to official data from last year.
Zadjali said he was happy that the ratio of Omanis working in the banking sector was rising. However, "I urge the banking community to increase the Omanization level in the higher and middle management cadre," he added.
The small non-OPEC oil exporter is keen to move more people into private sector jobs in preparation for an eventual fall in oil revenue, seen as possible later this decade.
The Shura Council has set a target for the number of foreign workers in Oman at 33 per cent of the country's total population to create what it called an employment balance, but it has not given a time frame. It has not said how the number of foreign workers will be cut.
The Central Bank has also set up a team to tackle a lack of liquidity management tools available to the country's newly established Islamic banks, Zadjali said.
"We are aware about the dearth of Islamic liquidity management tools, which are required for the successful liquidity management by our Islamic banks," he said.
"The CBO has constituted an internal task force to study the matter and propose suitable solutions." (KNN)