To: All Licensed Banks Operating in the Sultanate of Oman

After compliments,

Subject: Small and Medium Enterprises (SMEs)

1. Reference is invited to Circular BM 1150 dated April 26, 2017 on the subject matter.

2. The Central Bank has been reviewing the progress made by banks in lending to the SME sector and observes that there is further scope for improvement to achieve the National objectives.

3. Keeping the above in view and also requests of banks in this connection, it has been decided to allow banks to reckon fund-based credit facilities sanctioned to Government initiated/formally accredited funds/entities set up for the development of SMEs, for the purpose of on-lending to and for promotion of SMEs, as part of banks' SME lending - up to a maximum of 1.0% of the minimum stipulated 5.0% of total credit and subject to the following:

   • (i) Banks should carry out the requisite due diligence on the SME development funds/entities to which they propose to lend, at their risk and responsibility, ensuring compliance with regulatory/other requirements.