Includes how major projects are financed and gives examples where relevant. Explains activities of multilateral development banks in and other aid-funded projects where procurement is open.
Last Published: 11/20/2018

Personal loans still constitute the largest percentage of bank lending (approximately 40 percent of all outstanding loans) and reached OMR 8.2 billion in 2017. Omani banks are slowly beginning to heed calls for more financing of large industrial projects.  In February 2015, Bank Nizwa signed its first major project finance deal, a USD 40 million loan for the construction of an antimony plant. However, interest rates average 5.6 percent and can reach 15 percent for riskier projects. SME financing has been limited as banks are unwilling to take risks on start-ups, though the government is now promoting greater lending to start ups.

The Sultanate has two loan programs to promote investment. The Ministry of Commerce and Industry (MOCI) administers a program designed to promote industrial investment. Formerly interest free, the program now charges four percent annual interest, with generous repayment terms. MOCI loans will match equity contributions in the Muscat capital area, or 1.25 times equity for other locations. Projects with a high percentage of local content or employing large numbers of Omanis are given priority, as are tourism projects outside the capital area. Some large utility projects require 40 percent listing on the Muscat Securities Market (MSM) exchange within five years.
The Oman Development Bank (ODB) also administers loans with a OMR 1 million (USD 2.6 million) ceiling to support development of smaller industries in the agriculture, fisheries, petroleum, mining, and services sectors. ODB also offers an SME loan guarantee program in partnership with commercial banks, interest subsidies, and attractive export financing rates. Foreigners can participate in IPOs on the MSM via local brokers. Public joint stock companies (SAOG) may issue shares to the public with a minimum of OMR 2 million or USD 5.2 million. Investors may also seek financing from the Gulf Investment Corporation located in Kuwait. In 2013, the government launched the OMR 70 million Al Rafd fund to finance start-ups and entrepreneurial ventures.
 

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