Credit Bureau to strengthen Oman’s appeal as investment destination
ONE-STOP CENTRE: Proposed institution will serve as a benchmark for financial institutions in evaluating the credit worthiness of businesses, organisations and individuals
The establishment of a National Credit Bureau, a partnership agreement for which was signed on Thursday, bodes well for the Sultanate’s ambitions to emerge into a regional and global investment destination.
Oman is currently placed 133rd among 190 countries around the world based on the World Bank’s Ease of ‘Getting Credit’ Indicator. By establishing an international-class Credit Bureau, the Sultanate has the potential to dramatically improve its global standing as a destination for investment, according to a report by The National Programme for Enhancing Economic Diversification (Tanfeedh).
Tanfeedh, and its successor entity, the Implementation Support & Follow-up Unit (ISFU), have strongly advocated for the institution of a National Credit Bureau with a mandate to determine, among other things, the credit worthiness of businesses and individuals approaching local lenders for commercial credit.
On Thursday, the Central Bank of Oman (CBO) inked a strategic partnership agreement with Creditinfo Group, the leading global credit information and fintech services provider, which will provide a full range of products to support the “development, roll-out and management of a sophisticated and scalable credit registry system, including a modular credit reporting system with a roadmap of value-added products”.
The Reykjavík, Iceland-headquartered firm has supported the establishment of more than 33 credit bureaus around the world, while specialising in providing business information, risk management and credit bureau solutions to some of the largest, lenders, governments and central banks globally.
Importantly, the proposed Oman Credit Bureau will serve as a benchmark for financial institutions in evaluating the credit worthiness of businesses, organisations and individuals, according to ISFU.
“It will also serve as a tool to permit commercial lending, increase access to credit and reduce credit losses,” a report by 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.”
Oman’s National Credit Bureau, according to the ISFU report, 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.
In a statement, Creditinfo Group said the new Credit Bureau will be equipped to process credit data sourced from both banks and non-banking entities like providers of leasing finance, SME sector lenders, insurance companies, telecommunication companies, utilities and government data.