Wednesday 15 / January / 2025
Muscat: The number of loans granted during 2018 reached 1,841 loans worth OMR80 million while the total loans granted by the bank since its establishment in 1977 reached 44,288 loans worth OMR1.08 billion, Adnan Haider Darwish , General Manager of Oman Housing Bank (OHB) said.
Darwish also stressed that non-preforming loans are at low levels and likely to be the lowest among the banks operating in the Sultanate. Subsequently, the bank is not facing any problems in that respect. The bank’s general manager attributed this to the effective policy of collecting loan installments. The loan is paid by the borrower’s employer to the bank without having control over payment suspension. Moreover, the bank’s loans are secured by mortgages, and all the financed properties are insured against multiple risks, even the borrowers themselves are insured.
Concerning the mechanism of dealing with cases of default, Darwish explained that the bank’s system is checking all cases including the circumstances that are required to be taken into consideration after conducting the necessary research and a detailed study of each. Among the roles and responsibilities of the bank is the implementation of the public or private housing complexes or participating in financing them. He also added that the statute of the bank stipulates these responsibilities and roles, and are included in the bank’s strategy. But, he pointed out that the bank will engage in such projects in the suitable time.
Darwish referred to the effects of oil prices decline crisis since 2014 on the real estate and housing sector.
He denied that the bank was affected by this crisis and stressed that there was no impact of the decline in the oil prices concerning the allocations of loans granted. The budgets of these loans remained the same as before the drop in oil prices took place. The government, under the wise leadership of His Majesty Sultan Qaboos bin Said, is giving special attention to the housing sector. This derived from the idea of providing adequate housing for the citizen is one of the basic needs, which is necessary for a decent life .
However, Darwish acknowledged the impact of the decline in oil prices on the real estate sector significantly. Subsequently, other sectors were also get affected, as many economic sectors are connected with real estate sector in case of rising or decline.
He also pointed out that the real estate sector was affected by the decline in government expenditure on projects, which plays a pivotal role in the development process as the economic growth in the Sultanate depends on the rates of government spending.
Darwish also highlighted the official statistics regarding the real estate sector where the sector witnessed a sharp decline in the value of the real estate at the end of 2018 compared to the end of 2016. He also pointed out the lack of unit price index of the real estate sector in Oman through which we can know the amount of increase or decrease in the prices.
In response to calls asking for reducing or increasing the maximum amount of loans, which currently stands at OMR60,000 under the pretext of increasing the number of beneficiaries, Darwish illustrated that the current ceiling of the housing loan is the minimum that enables the borrower to obtain the suitable housing. At the same time, the budget allocated for housing loans, which aims to benefit the largest number of citizens from them making it is not possible to increase the maximum amount of the loan.
Darwish assured the bank’s devotion to provide the suitable modern housing for Omani citizens despite the recession in the real estate sector. He also pointed out, because of the current situation, there is unlikely to be a tendency to further reduce the fees for banking and administrative services.
He considered that these fees are “ fair” and commensurate with the financial capacities of the borrowers. The current fees are also non-competitive with other banks, as the government support OHB.
In response to the complaints of the long waiting period of the applicants, which in some cases reaching 4 years, the general manager of the bank assured that the current waiting period is less than 3 years. Also, as a solution for those who cannot wait for 3 years, the bank has signed agreements with some commercial banks under which these cases can obtain loans from specific banks at preferential interest rates lower than the prevailing market prices, until they have their turn in the bank’s system. He also added that after this step, the OHB will repay the balance of the loan to the commercial bank after 3 years.
Darwish highlighted the bank’s achievements including the launch of the electronic banking system, which is up to date with the latest developments in the field of information technology. Also, the bank has taken concrete measures to accelerate the work of electronic loan applications.
He explained that the bank is currently developing the process of dealing with the received applications. The Omani citizen will be able to submit his application electronically through the bank’s website, to makes it easier for the clients wherever they are.
Moreover, the OHB is currently having 9 branches spreading throughout the Sultanate to serve the largest number of clients.
Concerning the Omanisation rates at the bank, the general manager said that it reached 97 per cent.
He also pointed out that the bank is the first one reached this rate. Since its establishment, the bank started to train Omani employees, and Omanisation rates are increasing year after year, and maybe the bank can achieve full Omanisation if possible.
In the same context, Darwish sees that the appointment of Omani citizens and the jobseekers issues are among the issues that have received great attention by the country’s institutions. These two issues are having great importance in achieving economic and social stability, so the government has developed many solutions and mechanisms that contribute to reducing this problem. An example was given, which is the identification of Omanisation rate in the private institutions only granting work licences during the establishment phase. Moreover, the launching of soft loans programs for the implementation of small and medium enterprises. The government had identified an annual quota of posts in the public sectors to accommodate the graduates of universities and technical colleges, as well as the promulgation of policies and procedures governing it.
Darwish pointed out that there are other measure can be taken, such as organising the market and stimulating the economy through more economic policies. These policies will contribute to the continuation of business practices especially the policies that encourage the growth of small and medium enterprises. In addition to that, we should encourage increase all various projects in all sectors, as the government spending is the main supporter of development.
He also encouraged the concerned institutions to conduct comprehensive assessment of the educational policies at all levels. Also, he assured the importance of considering the academic offered programs and their suitability to the needs of the labour market. In that respect, a study should be conducted with the aim of knowing the needs of the local labour market. Also there should be a clear link between education and training outputs from one side and labour market requirements on the other side.
