Oman SMEs
SME stands for Small and Medium Enterprises. The Ministry of Commerce and Industry in Oman defines the term SME according to the number of employees in the company as shown below: Business Enterprise Number of employees Small 1-9 Medium 10-99 The total number of SME’s in Oman is around 48,000 according to 2008 figures, SME’s in Oman constituted about 90% of the total number of establishments. The challenges faced by SMEs in Oman Lack of experienced and capable management. Poor profitability of projects leading to high defaults. Financial structure heavily dependent on borrowings. Difficulties in obtaining appropriate guarantees. ODB’s role in financing SMEs Loans up to 50,000 are managed by the branches, loans above this amount are hendeled by the head office. ODB provides SME term loans for the development of various economic activities in the country including: Educational Loans Health Loans Agricultural Loans Animal Wealth and Fisheries Loan Industrial Projects Loans Tourism Projects Loans Professional Loans ODB has recently commenced providing Working Capital (Pre-shipment & Post-shipment Finance) to SMEs as well as “Mawsimi” Agricultural Seasonal Loans. Guaranteed Loan Program(GLP) ODB is taking part in the pilot guaranteed loan program implemented by the Ministry of Commerce & Industry in consultation with the United States Small Business Administration. The program envisages to support SMEs through facilitating loans up to RO 250,000 from designated commercial banks for project costs up to RO 500,000. ODB will guarantee the commercial bank for an amount up to 50% of the loans granted under the program. The program will be beneficial for young entrepreneurs who have shortage of collaterals for getting finance for potential projects.