RIYADH: In a major push to bolster startup growth, Oman’s Small and Medium Enterprises Development Authority has unveiled a series of pivotal amendments to the regulatory framework governing SME and craftsman financing.
Among the most significant changes, the loan ceiling has been raised from 5,000 Omani rials ($12,994) to 20,000 rials, and additional administrative fees have been waived.
Moreover, the maximum loan value and upper age limit for applicants have been removed, allowing more entrepreneurs to access funding.
Article 14, which previously imposed a cap on financing at 50 percent of the original funding, has now been removed. The move is intended to boost flexibility for the growth and sustainability of the SME sector in the country.
These revisions are poised to stimulate both local and international expansion of SMEs, augmenting their contributions to Oman’s gross domestic product and overall economic advancement.
The restructured regulations introduce greater flexibility in loan disbursement, catering to the specific needs and nature of each project. They also open doors for financing projects that have previously secured funding with varying loan values.
Furthermore, the revised framework sets a maximum 60-day period for decision-making on financing requests. It also outlines mechanisms for disbursement, grace periods for repayment, and beneficiaries’ obligations.
As of Aug. 10, the SME Development Authority has approved 170 financing requests, aggregating to 15.7 million Omani rials in 2023.
The Industrial Projects and Services Financing Program dominated the year, encompassing 110 requests totaling 11.4 million Omani rials. Other programs such as Contract Financing and Working Capital and Fixed Assets Financing also garnered significant attention.
Geographically, the province of Muscat took the lead in approved financing, with 63 requests totaling 4.9 million Omani rials. North Al Batinah and South Al Batinah regions followed suit with 29 and 19 approved requests, respectively.
In addition to financial support, the regulatory amendments mandate periodic follow-ups by the authority and the Omani Development Bank. These reviews aim to identify challenges faced by projects and devise suitable solutions.
The authority has concurrently introduced seven financing programs catering to diverse sectors. These initiatives include programs for industrial projects, craft businesses and even mobile commercial activities. The scope extends to SMEs that have contracts with Omani Investment Authority-affiliated companies.
