New Loan Guarantees in Oman: What This Means for SME Financing and Business Growth
MUSCAT: The Development Bank has joined forces with Sohar International to launch a new loan guarantee programme aimed at improving financing access for Omani businesses, particularly small and medium enterprises (SMEs) looking to expand or start new projects.
This initiative supports ongoing national efforts to foster private-sector growth and diversify the economy by addressing the financing challenges faced by promising companies during critical growth phases.
Under the programme, Sohar Islamic will provide Sharia-compliant financing to qualifying businesses, while the Development Bank will guarantee between 50% and 80% of the loan amount, depending on the project’s size, nature, and economic viability. This risk-sharing model is designed to encourage banks to increase lending by reducing their financial exposure.
Hussein bin Ali al Lawati, CEO of the Development Bank, highlighted that the programme will enable Omani firms to advance their growth by expanding funding opportunities, allowing more enterprises to invest, scale operations, and create jobs. He also emphasized that collaboration with banking partners enhances the availability of diverse financing options across Oman and boosts market credit confidence.
Abdul Wahid bin Mohammed al Murshidi, CEO of Sohar International, stressed that sustainable SME growth depends not only on liquidity but also on effective risk management and disciplined capital allocation. He affirmed the bank’s commitment to expanding Sharia-compliant financing through strong guarantee frameworks that build trust in lending to SMEs and key economic sectors.
Designed as a scalable model, the loan guarantee programme can be extended to additional banks in the future. By aiding companies transitioning from planning to implementation phases, the initiative aims to stimulate investment, promote local value creation, boost non-oil export potential, and contribute to job creation—strengthening the resilience and competitiveness of Oman’s private sector. — ONA
Special Analysis by Omanet | Navigate Oman’s Market
The Development Bank’s new loan guarantee programme with Sohar International significantly mitigates financing risks for SMEs, unlocking vital capital for expansion and new projects. This strategic move creates growth opportunities in non-oil sectors and enhances private-sector resilience, making it a key signal for investors and entrepreneurs to prioritize Omani SMEs with scalable, Sharia-compliant financing needs. Smart players should now leverage these supportive credit mechanisms to tap into emerging markets and bolster economic diversification in Oman.
