ODB funding of businesses creates about 8,000 jobs

FINANCING: Number of loans until 2016 stands at 33,643, valued RO 272 million

Oman Development Bank (ODB) has disbursed a total of 33,643 loans over the 2009 – 2016 timeframe totalling RO 272 million across the Sultanate, according to a high-level official.

Ahmed bin Khalifa al Hajri, Manager at ODB’s Head Office, said the beneficiaries included businesses across all production segments of the economy. Around 8,000 jobs were also created for nationals as a result of these loan disbursals during this period, which underscored the Bank’s commitment to SME development and Omanisation, he said.

Al Hajri was speaking on the second day of the Regional Seminar on SME Development, which is currently under way at the Crowne Plaza Muscat. His presentation highlighted the role of lending institutions, such as ODB, in supporting small and medium enterprises.

“The bank has always supported micro businesses, having provided 32,849 loans totaling RO 160 million until the end of 2016, while 19 macro businesses received RO 18 million in funding, 92 medium units received an aggregate of RO 44 million, and 404 other small businesses received a total of RO 50 million. The portfolio of bank finance rose from RO 63 million in 2009 to RO 127 in 2016 reflecting the bank’s interest in extending financial support to small businesses in line with the government’s vision for enhancing the role of the private sector in the economy,” the official said.

Commenting on the constraints faced by lenders like ODB, Al Hajri said: “Some of the challenges we encounter when approached for bank loans is the absence of feasibility studies backing the application, reproduction of business ideas, absence of skills on the part of investors, lack of self-financing sources, accumulation of corporate debts, lack of sound planning and fear of failure.”

While these challenges are typically encountered during the start-up phase, other problems surface during the operational stages of the business. These include: insufficient funding, improper accounting, liquidity issues, overlapping personal and business accounts, weak management, inefficient staff, and so on. Weak marketing abilities and poor entrepreneurship and other concerns too.

Also weighing down small businesses are market related factors, such as the credible market data, competition by clandestine players, lack of cooperation between SMEs and big enterprises, and poor productivity, and so on.