Banks in Oman see growing demand for personal finance
July 1, 2015 | 6:20 PM
by ELHAM POURMOHAMMADI/[email protected]

MUSCAT: An increase in demand for personal finance products has been witnessed by banks in Oman, which also see the trend as an upward one.

Bank Nizwa, Oman’s first Islamic bank, says its personal finance products have been witnessing an organic growth due to the bank’s expanding network of branches, availability of a host of offerings and the growing sales team that cater to its growing customer base across the Sultanate.

Since the products are based on the ‘end-use’ Islamic personal finance solutions, they actually help customers in meeting day-to-day needs rather than taking cash, overspending and getting into debt, Asad Batla, head of consumer banking at Bank Nizwa, told ‘Times of Oman’.

Asked how Bank Nizwa sees the trend, Batla said, “The trend is definitely an upward one. Our strategy is paying off with more and more people understanding Islamic finance and looking into Sharia-compliant banking solutions as an alternative to conventional banking.”

Innovative products

Bank Nizwa’s innovative products include savings, current and investment deposits accounts as well as home, personal and auto finance solutions, he said. “These solutions are sometimes season-dependent. For example, auto finance experiences a surge in demand during Ramadan and holidays,” said Batla.

According to him, the suite of financing solutions available to customers includes financing of land, financing ready property or those under construction, andthe most popular offering for customers is home financing and building materials.

Home finance

Recently, Bank Nizwa started offering customers the opportunity to transfer their home mortgages to avail of the bank’s Islamic home financing, said Batla. The head of consumer banking at Bank Nizwa also said that the bank is in the process of launching a range of Sharia-compliant credit cards, which is expected very soon.

Salim Al Kalbani,acting head of retail products, business and segments department at Bank Dhofar, also said that the bank has seen an increase in personal loans this year, as well as car loans, housing loans and education loans.

“The demand in personal loans in particular reflects the overall trend in consumers’ habits. People have access to different facilities offered by financial institutions across the Sultanate and they have more options available to fulfill their needs,” he said.

The increase in loan demand also shows the constant efforts by BankDhofar to provide best customer experience through various products and services, said Al Kalbani.

Loan portfolio

Asked about the loans provided by the bank in 2013 and 2014, the official said that there was a significant increase in loan portfolio during this period, accompanied by an increase in the bank’s loan facilities including car loans, housing loans and education loans.

In addition, Yousuf Al Rawahi, deputy general manager - head of branches, retail and private banking at Ahlibank, says that the bank is seeing a ‘sustainable’ growth in loans, mainly auto and house requirements.

Commenting on the reasons behind the increase in demand, he said that there are new entrants in jobs being created with the growth in the economy and one of the requirements of individuals is to borrow for various purposes.

“As the concept of nuclear families increases, so will the requirement of personal needs, which are often funded through bank borrowings,” Al Rawahisaid.

Overall trend

Asked about the trend, the official said that the overall trend is increasing due to these factors as well asthe growth of inflation, increased housing requirements, and the increasing number of people moving to the capital area.

Asked about the personal loans provided by the bank in 2013 and 2014, Al Rawahi said, “Our bank has been increasing its market share consistently over the past two years. We are estimated to have around 7 to 8 per cent of the consumer market and have grown by around 3.5 per cent in the current year, whereas the market growth has been approximately 1.6 per cent.”

Asked which types of loans are in high demand, he said, “Loans are usually for housing, car and personal needs. On an average, growth is mainly in line with the overall outstanding in these segments. Most loans are for end use and some for funding lifestyle requirements.”

Subscribe to our newsletter and be the first to know all the latest news