Financial inclusion of small and medium sized enterprises in the sultanate of Oman: The bank's view

Abstract

The present study was conducted to comprehend the role played by banks in the financial inclusion of SMEs in the Sultanate of Oman. The reports of the International Monetary Fund (IMF) say that Small and Medium Sized Enterprises (SMEs) in the Middle East face financial exclusion on a large-scale basis and there is a substantial scope to increase the SMEs access to finance in the Middle East. The situation is not different in Oman too and this urged us to understand the different financial services offered by the banks for SMEs, the initiatives taken by the banks to encourage the SMEs to use their services and understand the reasons for a decreased rate of financial inclusion of SMEs from the point of view of the bankers. Thirty employees of private and government sector banks were chosen using purposive sampling and surveyed using a questionnaire created based on the review of the literature. The survey results interpreted using descriptive statistics and percentage analysis revealed that the banks take initiatives to encourage the SMEs for accessing tailor-made services through a separate dedicated division. Even then, very less respondents agreed to provide loans to SMEs with limited conditions and at reduced transaction processing time. According to the respondents, the SMEs transact less with the banks because, they are reluctant to meet even the reduced bank service charges and find difficulty in understanding the bank policies.