Latest news with #creditgrowth
Arab News
01-06-2025
- Business
- Arab News
Oman's banking sector credit rises 9% to $87.3bn
RIYADH: Total outstanding credit extended by Oman's banking sector, comprising both conventional and Islamic institutions, rose by 9 percent year-on-year to 33.6 billion Omani rials ($87.3 billion) at the end of April, according to new data. According to the Central Bank of Oman, private sector credit rose by 7 percent to 27.8 billion rials. Non-financial corporations held the largest share at 46.6 percent, followed closely by the household sector at 44 percent. Financial corporations held 5.6 percent, while other sectors represented the remaining 3.7 percent. Deposits across the banking system also showed robust growth. 'Total deposits held with ODCs (other depository corporations) registered a YoY significant growth of 9.3 percent to reach 32.8 billion Omani rials at the end of April 2025,' the report stated. Of this, private sector deposits reached 21.5 billion rials, a 7.1 percent increase from the previous year. Household deposits contributed the largest share at 50.3 percent, followed by non-financial corporations at 30.4 percent, financial corporations at 17 percent, and other sectors at 2.3 percent. Credit extended by conventional banks grew by 7.9 percent to 21.3 billion rials, while their aggregate deposits increased by 6.1 percent to 25.7 billion rials. The banking sectors across the Gulf Cooperation Council countries have demonstrated credit growth, reflecting the region's economic resilience and strategic investments. In Saudi Arabia, outstanding credit facilities reached SR2.96 trillion by the end of the fourth quarter of 2024, marking a 14.4 percent year-on-year increase. However, Qatar's banking sector saw a slight contraction, with total credit facilities declining by 0.2 percent to 1.4 trillion Qatari riyals, primarily due to reduced lending to the public sector and consumption. Oman's private sector deposits with conventional banks rose 4.5 percent to 16.8 billion rials in April. Investments in government development bonds increased by 6.2 percent to 2 billion rials, whereas holdings in foreign securities declined by 3.7 percent to 2.1 billion rials. Islamic banks and windows also demonstrated strong performance. Their total assets increased by 18.1 percent to 8.9 billion rials, accounting for 19.6 percent of the total banking assets. Financing provided by these entities reached 7.2 billion rials, marking a 13.5 percent annual increase. Total deposits held by Islamic banks and windows increased by 22.6 percent to 7.1 billion rials. Broad money supply grew 7.5 percent to 25.4 billion rials, driven by a 12 percent rise in narrow money and a 6 percent increase in quasi-money components. Currency held by the public rose by 7.5 percent, while demand deposits expanded by 16.8 percent. Interest rate trends showed mixed movements. The weighted average interest rate on deposits with conventional banks rose to 2.594 percent in April, up from 2.580 percent a year earlier. Meanwhile, the weighted average lending rate fell to 5.555 percent from 5.604 percent. The overnight domestic interbank lending rate dropped to 4.392 percent, down from 5.212 percent the previous year, reflecting a decrease in the central bank's repo rate to 5 percent in line with US monetary policy trends. Oman's nominal gross domestic product increased by 1 percent yea on year in the fourth quarter of 2024, driven by a 4.1 percent expansion in the non-hydrocarbon sector. Real GDP rose by 1.7 percent, supported by 3.9 percent growth in non-hydrocarbon activities. The average oil price stood at $75.9 per barrel at the end of April, 5.2 percent lower than a year earlier. Average daily oil production was 986,700 barrels, reflecting a 1 percent decline. Consumer price inflation remained subdued at 0.9 percent year on year as of April.
Times of Oman
31-05-2025
- Business
- Times of Oman
Credit granted by banks in Oman reaches OMR33.6bn
Muscat: The total credit granted by the Omani banking sector rose by 9 percent to OMR33.6 billion by the end of April 2025. Data issued by the Central Bank of Oman (CBO) indicated that credit granted to the private sector grew by 7 percent, reaching OMR27.8 billion by the end of April 2025. Data on its distribution across various sectors indicate that the non-financial corporate sector accounted for the largest share, representing 46.6 percent by the end of April 2025, followed by the individual sector at 44 percent. The remaining share was distributed between the financial corporate sector at 5.6 percent and other sectors at 3.7 percent. Total deposits in the Omani banking sector grew by 9.3 percent, reaching OMR32.8 billion by the end of April 2025. Within this total, private sector deposits in the banking system increased by 7.1 percent, reaching OMR21.5 billion by the end of April 2025. When looking at the distribution of the total private sector deposit base across various sectors, the figures indicate that the individual sector holds the largest share, amounting to approximately 50.3 percent, followed by the non-financial corporate sector and the financial corporate sector with shares amounting to 30.4 percent and 17.0 percent, respectively. The remaining percentage (2.3 percent) was distributed across other sectors. Domestic liquidity hits OMR25.1bn Domestic liquidity in the Sultanate of Oman registered a remarkable growth by the end of January 2025, reaching OMR25.61 billion, a 7.2 percent increase compared to the same period in 2024, when it reached OMR23.375 billion. Preliminary data released by the National Centre for Statistics and Information (NCSI) showed that total loans and financing provided by commercial banks and Islamic windows rose by 6.5 percent to OMR32.47 billion by the end of January 2025, compared to OMR30.48 billion by the end of January 2024. The average interest rate on total loans also rose by 1.1 percent to 5.608 percent by the end of the same period. In the same context, private sector deposits in commercial banks and Islamic windows increased by 7.2 percent to OMR20.967 billion by the end of January 2025 compared to OMR 19.559 billion by the end of January 2024. Total foreign assets at the Central Bank of Oman (CBO) also increased by 5.3 percent reaching OMR7.096 billion by the end of January 2025 compared to OMR6.741 billion during the same period in 2024. As for the narrow money supply (M1), which consists of total cash outside the banking system in addition to current accounts and demand deposits in local currency, it witnessed a significant increase of 15.5 percent reaching OMR7.32 billion compared to OMR6.90 billion at the end of January 2024. On the other hand, cash issued decreased by 8.3 percent to reach OMR1.44 billion by the end of January 2025 compared to OMR1.57 billion by the end of January of the previous year. The effective exchange rate of Omani riyal rose by 2.7 percent to reach 119.1 points, compared to 116 points at the end of January 2024.
Entrepreneur
28-05-2025
- Business
- Entrepreneur
Is India Doing Enough to Fuel NBFC Growth?
According to RBI data, credit growth to NBFCs decelerated sharply to 7.8 per cent in November 2024, down from 19 per cent a year earlier. Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Non-Banking Financial Companies (NBFCs) have long been the unsung workhorses of India's financial architecture. Often reaching where traditional banks don't, NBFCs serve as critical credit wires in semi-urban and rural regions, powering the country's micro, small and medium enterprises (MSMEs), informal sector, and climate-forward financing initiatives. Recognizing their indispensable role, the Indian government, alongside the Reserve Bank of India (RBI), has stepped up support in recent years. But is this support enough to ensure sustainable growth? The intent is certainly visible. "Government understands the importance of credit in an economy like India, especially the underserved areas of the country," said Vivek Iyer, partner and financial services risk leader at Grant Thornton Bharat. "Hence, it focuses on creating an enabling environment through the regulator, which is the Reserve Bank of India, for a robust credit access environment through the NBFCs." The RBI has shown flexibility and foresight, particularly during economic stress. Regulatory forbearance measures and discussions around liquidity backstop arrangements underscore the shift from reactive to proactive oversight. According to Iyer, "Due credit must also be given to the regulator for applying regulatory forbearances during times of government is doing the right amount for the NBFC ecosystem." A defining moment came in early 2025 when the RBI reduced risk weights on bank exposures to well-rated NBFCs, a move widely seen as an effort to ease credit flows. "This marked a critical intervention aimed at improving systemic liquidity and easing access to funds," said Dhiraj Agrawal, CBO of Mufin Green Finance. This regulatory tweak is designed to incentivize banks to lend more actively to financially sound NBFCs, indirectly strengthening the broader credit chain. Beyond regulatory nudges, government-backed institutions like SIDBI and NABARD continue to offer crucial refinancing support, especially to smaller NBFCs operating in last-mile geographies. These bodies serve as lifelines for non-bank lenders that extend credit to micro-entrepreneurs and rural households. Moreover, the expansion of the Credit Guarantee Scheme (CGS) has provided additional firepower, allowing NBFCs to tap into banking lines while mitigating perceived credit risks. Yet, the numbers paint a more sobering picture. According to RBI data, credit growth to NBFCs decelerated sharply to 7.8 per cent in November 2024, down from 19 per cent a year earlier. This dip signals persistent liquidity constraints and a rising risk aversion, especially toward smaller or newer NBFCs without access to low-cost, long-term capital. Agrawal warns that structural problems remain. "To fully realize the potential of NBFCs in driving inclusive growth, targeted reforms are now necessary." He advocates for a tiered regulatory approach, increased access to concessional and blended capital, particularly for green and impact-focused lenders, and the creation of long-term funding avenues like ESG-linked bonds and pooled finance structures. "NBFCs remain a vital pillar of India's financial ecosystem," he emphasized, calling for regulatory clarity and deeper capital access to sustain their momentum. Deepak Aggarwal, co-founder, co-CEO & CFO of Moneyboxx Finance Limited, echoed similar sentiments. He credited the government for positive interventions such as the co-lending framework and the First Loss Default Guarantee (FLDG) structure. "These measures have improved credit flow in specific segments and encouraged collaboration between banks and NBFCs for deeper financial outreach," he said. The FLDG, in particular, introduces a much-needed regulated mechanism for risk-sharing in digital lending—a space that has been both a frontier and a flashpoint for regulatory concern. Meanwhile, the co-lending framework has allowed NBFCs to leverage banks' balance sheets, creating a more structured risk-sharing ecosystem. Still, as Deepak noted, "There is room for further support to help NBFCs scale their impact, especially those serving rural and semi-urban borrowers." While refinancing facilities exist, their scale and reach remain limited. He emphasized that NBFCs can only continue playing a meaningful role in financial inclusion if they are granted broader access to stable capital and more streamlined funding pathways. As per a report by CareEdge Ratings, MSME lending has witnessed robust growth in recent years, with NBFCs emerging as the front-runners, outpacing the growth rates of both private and public sector banks. Between FY21 and FY24, NBFCs recorded a 32 per cent compound annual growth rate (CAGR) in MSME lending, albeit on a smaller base, compared to 20.9 per cent for private banks and 10.4 per cent for public sector banks. Read more
Arab News
18-05-2025
- Business
- Arab News
Omani banking sector credit surges 7.4% in February
RIYADH: The total credit extended by Oman's banking sector surged by 7.4 percent year on year to reach 32.9 billion Omani rials ($85.46 billion) by the end of February, new figures showed. Released by the Central Bank of Oman, the data indicated that credit extended to the private sector rose by 6.1 percent annually to 27.3 billion rials during the same period. This aligns with Oman's projected economic growth of 3.4 percent in 2025, outpacing many global peers, according to Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed Al-Yousef, who spoke at the International Investment Forum in Muscat in April. The February report said: 'Non-financial corporations received the highest share of the total private sector credit at approximately 46.3 percent at end-February 2025, followed by the household sector at 44.3 percent.' It added: 'The share of financial corporations was 5.5 percent while other sectors received the remaining 3.8 percent of total private sector credit as at the end of February 2025.' The analysis further revealed that total deposits in the Omani banking sector registered a 6.4 percent year-on-year growth to reach 32 billion rials at the end of February. It added that total private sector deposits increased 8.2 percent to 21 billion rials. 'In terms of sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 50.3 percent, followed by non-financial corporations at 30.4 percent, financial corporations at 16.9 percent and other sectors at 2.4 percent,' the report concluded in that regard. In January, the 2024 Article IV consultation issued by the International Monetary Fund disclosed that Oman achieved a 6.2 percent budget surplus and a 2.4 percent current account gain in 2024, driven by prudent fiscal policies, high oil prices, and nonhydrocarbon export growth. At the time, the IMF attributed these figures to effective economic management. Despite higher social spending under a new protection law, the nonhydrocarbon primary deficit as a share of nonhydrocarbon gross domestic product remained stable, highlighting the government's commitment to financial discipline, the IMF release explained at the time. Government debt as a percentage of gross domestic product also declined further, reaching 35 percent in 2024, marking continued improvement in Oman's economic fundamentals. The findings reflect the broader resilience across the Gulf Cooperation Council region, as highlighted in a December IMF report, which noted that GCC economies have successfully navigated recent shocks, thanks to robust non-hydrocarbon growth and continued reform efforts.
