The Authority for Small and Medium Enterprises Development (ASMED) recently held a dialogue session in Muscat aimed at increasing SMEs’ access to financing options available in commercial banks. The session highlighted the importance of enabling SMEs to grow and contribute more to the Gross Domestic Product (GDP). This initiative was part of a larger effort to develop a national strategy for SMEs, led by the “Fiscal Sustainability and Financial Sector Development” programme “Estidamah” in collaboration with ASMED, the Central Bank of Oman (CBO), and the banking sector.
During the session, key challenges faced by commercial banks in financing SMEs were identified, and possible solutions to improve credit facilities were proposed. The ultimate goal is to establish a roadmap for providing financing options for SMEs and launching initiatives to address current challenges in cooperation with partners from the public and private sectors. The discussion also focused on the difficulties commercial banks face in providing financing to SMEs at a rate of 5 percent of their total portfolios, as well as the experience of a leading commercial bank in this area.
Data released by the CBO indicated that the percentage of SME financing, out of the total credit granted by commercial banks, was 3.5 percent during the first quarter of 2024, increasing to 3.7 percent during the last quarter of the same year. The dialogue session brought together representatives of Estidamah, CEOs and their assistant at commercial banks, and entrepreneurs who own SMEs to collectively address these issues and work towards finding sustainable solutions to boost financing options for SMEs.
The dialogue session was just one step in the broader effort to elevate SME financing in Oman. By increasing access to financing options for SMEs, commercial banks can play a pivotal role in driving economic growth and supporting the development of small and medium enterprises. With the support of key stakeholders from the public and private sectors, including ASMED, the CBO, and leading commercial banks, efforts are underway to establish a comprehensive strategy that will empower SMEs and enhance their ability to contribute more significantly to the country’s GDP.
The dialogue session aimed to shed light on the challenges and opportunities in SME financing through commercial banks. By addressing key issues faced by both SMEs and banks, such as credit availability and risk assessment, the session paved the way for future collaborations and initiatives that will support the growth of SMEs in Oman. Moving forward, it is essential for all stakeholders to continue working together to implement sustainable solutions that will ultimately benefit the entire economy.
In conclusion, the dialogue session organized by ASMED was a crucial step towards enhancing SME financing in Oman. By bringing together key stakeholders and facilitating discussions on challenges, opportunities, and potential solutions, the session set the stage for coordinated efforts to support the growth and development of small and medium enterprises. By working collectively with commercial banks, government agencies, and other partners, Oman is poised to strengthen its SME sector and foster long-term economic growth in the years to come.
