MUSCAT: Banks should be given more time to comply with the decision of the Central Bank of Oman (CBO) that requires them to allocate 5 per cent of their total loans to small and medium enterprises (SME), said a senior Omani official.
“It is nearing 3 percent now (while) they have to reach 5 percent. The reason is that our definition of the SMEs is very strict,” Ali bin Masoud Al Sunaidy, the minister of commerce and industry, told reporters on Tuesday.
He made the comments after an agreement signing ceremony in which a number of companies joined hands with the Public Authority for Small and Medium Enterprises Development (Riyada) to support entrepreneurs through special offers on their products and services.
In 2013, CBO stipulated that commercial banks’ loans to SMEs must account for at least 5 percent of their total loans, in a bid to contribute to the development of the entrepreneurship sector in the country.
Al Sunaidy said that the banks are growing so the 5 percent is becoming a greater amount and they have been requesting that the definition of SMEs be revised. “We have not agreed on expanding the definition. We are still putting pressure on the banks,” the minister added.
He said that there are several options to address this issue, namely revising the 5 percent, giving them a longer period to meet the target or changing the definition. “My opinion is (to) give them a longer period. Keep the 5 percent. Do not change the definition for now and do not push them to (reach) the 5 percent very aggressively,” Al Sunaidy noted. The minister believes that another extension may be necessary.
