13/06/2018 07:55 AST

Oman’s authorities are making positive headway in the establishment of a Credit Bureau — a first of its kind institution that will have the mandate to, among other things, determine the credit worthiness of businesses and individuals approaching local lenders for commercial credit.

The facility, when operational, is expected to significantly reduce delays in the processing of applications for business loans and other forms of credit — a shortcoming that has taken a toll on Oman’s ranking on the World Bank’s Ease of Doing Business index. The Sultanate is currently placed 133rd among 190 countries around the world based on the ease of ‘Getting Credit’ indicator. By establishing an international-class Credit Bureau, Oman seeks to dramatically improve its global standing as a destination for investment.

According to the Implementation Support & Follow-up Unit (ISFU) — a key task force set up by the government to oversee the speedy delivery of a number of economic initiatives — the proposed Credit Bureau will serve as a benchmark for financial institutions in evaluating the credit worthiness of businesses, organisations and individuals.

“It will also serve as a tool to permit commercial lending, increase access to credit and reduce credit losses,” the task force said. “The Credit Bureau will also augment government supervision in connection to risk management. The purpose of this initiative is to rank Oman first among GCC countries in the Getting Credit indicator of the Ease of Doing Business Index by 2020. Currently, Oman is ranked number four among the GCC countries.”

Significantly, the Credit Bureau will be authorised to collect credit information about individuals and entities, which can be used by “financial institutions, local and international companies, small and medium sized enterprises (SMEs) and credit rating agencies” among others. “The Bureau will also seek to increase the number of loan recipient institutions and facilitate access to bank loans. The initiative seeks to measure progress in the establishment of a Credit Bureau,” it stated. An important beneficiary is expected to the SME sector credit to which has been patchy for want of adequate background information on loan applicants.

This is evident from the Central Bank of Oman’s (CBO) 2014 findings that loans received by SMEs represented only 13 per cent of their total funding. Lack of documentation and supporting documentation was cited as a key factor.

Lending to SMEs is also associated with high loan charges, fees and bank interest rates, it noted. According to ISFU, a number of challenges as well as differences of opinion were encountered during deliberations on the scope and operation of the proposed Credit Bureau. For example, banks and finance companies said they could not share data between them; utilities, retail, automobile companies and landlords asserted that they do not have access to the credit history of consumers; the Bank Credit & Statistical Bureau (BCSB) warned that it only has two years of back data; and consumer loans were subject to a regulatory interest rates cap.

“Despite the difficulties this initiative has faced in starting up, ISFU’s continuous pursuit and relentless efforts for this project proved to be successful. ISFU worked upon emphasising the importance of access to credit to Oman’s economy and business environment as well as its overall impact on the Ease of Doing Business Index,” the Unit said in its Annual Report.


Oman Daily Observer

Ticker Price Volume
JADCO 23.24 26,909
EXTRA 54.30 397,415
SECO 18.40 732,542
SAMBA 29.80 1,824,433
SISCO 13.44 432,595
KEC 10.44 169,610
FARM 18.72 38,399
ICD gains from robust capital position and strong liquidity

16/08/2018

The Islamic Corporation for the Development of the Private Sector (ICD, Aa3 stable) benefits from a robust capital position and strong liquidity, although its weak asset quality remains a challenge,

Saudi Gazette

Governor of Saudi Customs inspects Jadidat Arrar Port to ensure smooth processes

16/08/2018

Governor of the Saudi Customs General Authority Ahmad bin Abdulaziz Al-Hakbani visited Jadidat Arrar Customs Port on Sunday (Aug. 4, 2018) to oversee preparations taking place for welcoming Haj pilgr

Saudi Gazette

UAE tops Arab world in competitiveness

16/08/2018

The UAE, which leads the Arab region in terms of competitiveness, and is home to many tech firms, needs to increase efforts to expand the use of latest digital technologies to further enhance its dom

The National

Four-day Eid holidays for banks in the UAE

16/08/2018

Banks operating in the UAE will observe a four-day holiday on the occasion of Eid Al Adha. The Central Bank of UAE (CBUAE) has notified banks that the holidays will start on Monday, August 20, and th

Gulf News

Qatar promises $15b investment in Turkey: presidency

16/08/2018

Qatar pledged $15 billion (Dh55.09 billion) of investment in Turkey that will be channeled into Turkish financial markets and banks, a government source told Reuters yesterday. The investment package

Gulf News