23 August 2017 Conrad Prabhu
The Central Bank of Oman (CBO) is strongly advocating for financial inclusion in the Sultanate by encouraging commercial banks to ramp up the provision of banking services to under-served sections of the community, as well as in under-banked areas of the Sultanate.
Financial inclusion, the apex bank said in its Financial Stability 2017 Report, “not only aids inclusive growth but also offers venues to boost financial stability through a wider and more diversified user base and a deeper financial system”.
Towards this end, the CBO adopted a number of measures to bolster financial inclusion across the Sultanate. In guidelines issued by the Central Bank last year, commercial banks were advised to open new branches and expand their presence in remote, under-banked parts of the country with a view to boosting economic activity in these areas.
As an incentive to commercial banks in this regard, the apex bank has made approvals for new banking outlets conditional upon the provision of services in under-banked areas.
Likewise, seeking to ensure that the credit and banking requirements of small and medium businesses are suitably met, the Central Bank has applied the same criteria adopted by the Public Authority for Small and Medium Enterprises (PASMED) for the classification of SMEs. Aside from commercial banks, finance and leasing firms are also called upon to extend all possible financial assistance to the SME sector.
Importantly, lending to SMEs has increased more than 50 per cent during the year, although from a low base, according to CBO. The potential for channelling credit to small businesses is significant, given that the credit allocation to the segment was only about 4 per cent of the total lending portfolio of commercial banks, it said.
Also as part of its financial inclusionary policies, the Central Bank has urged banks to extend banking assistance to the physically challenged and others with special needs.
© Oman Daily Observer 2017