Financing Facilities

Oman's banking sector consists of 13 local and foreign commercial banks and three specialized banks. Some local banks have significant foreign shareholders, with expatriates in senior positions.  The banks are subject to close supervision by the Central Bank of Oman (CBO).  The CBO recently raised its minimum capital requirements, forcing several bank mergers.  The most recent merger is that of Bank Majan with Bank Dhofar al Omani al Fransi.  Foreign banks find onerous Central Bank requirements that banks maintain a 12 percent level of capital adequacy and restrict consumer lending to 40 percent of the loan portfolio.  The banks have led other sectors in meeting Omanization targets.

In addition to commercial banks, Oman Housing Bank and Oman Development Bank (ODB) are specialized government banks serving specific sectors.  ODB absorbed an agriculture and fisheries bank in 1997.  ODB's Export Credit and Financing Unit provides export financing and credit insurance.  ODB lending targets small businesses, extending loans for industrial projects valued at up to $650,000.  The Ministry of Commerce and Industry guarantees loans secured through commercial banks.  The Ministry will guarantee loans of up to 125 percent of the equity invested in projects outside of the capital area.

Several institutions engage in investment banking on behalf of the Omani government.  Their activities range from investing and underwriting to advisory services and fund management.  Among these is a bi-national profit-seeking entity of Oman and the Emirate of Abu Dhabi: the Oman-Emirates Investment Holding Company.  There are also several non-bank financial companies that provide medium-term asset financing to corporate customers (primarily for leasing), including:

  • Oman Investment and Finance Company, total capital RO5 million ($13 million);
  • National Finance Company, total capital RO6 million ($15.6 million);
  • Muscat Finance Company, total capital RO6.5 million ($17 million);
  • Oman Oryx Leasing Company, total capital RO5 million ($13 million);
  • Al-Omaniya Financial Services, total capital RO5 million ($13 million).