Loan is one of the popular ways in our Omani community to get money on hand, once the
primary source of income does not cover the daily life expenses. Therefore, the majority of
them want to banks to get that loan, but the problem in which most of debtors are suffering
from is the interest rate of this kind of loan. On the other words, the rate on the personal
loan is high which leads to limit the income uses and being not able to meet the needs of
life. Consequently, the living standards of people will go down and it will affect the whole
economy of the country, in addition to the political stability in the country.
So, the Omani people has sent a message to their official representative Council which is
AL-Shura Council to reduce this rate on personal loan, due to high cost of living in the
country and the need for the loan in the completion of the essential needs of life. Then,
AL-Shura Council has held a meeting with their members chaired by HE Khalid Bin Hilal
Al Ma’awali, Chairman of the Council. It discussed the report of the financial and
economic committee on personal loans. Then, it approved the report of the economic and
financial committee on the personal loan. The committee prepared its report after meetings
and hosting officials from the Central Bank of Oman (CBO), commercial banks and after
studying its social and economic impact. The committee collected information, data and
statistics from official sources and its agreed to reduce the interest rate of personal loan
from 7% till 5%. The report of the committee covers five themes including personal loan
schemes, analysis of personal loans policies, borrowers’ income, personal loan interest rate
structures, personal loan default payment problem and recommendations of the committee
on each of these.
The committee’s recommendations aim to address the personal loan issue and alleviate
their negative impact by introducing amendments on personal loan procedures, addressing
current condition of borrowers, non-performing loans as of December 31, 2012 and special
default borrowers cases. The members of the Shura stressed the importance of studying a
mechanism to reconsider the size of interest on personal loans and outlining rules to
regularize the process in coordination with the CBO.
My view towards reducing the interest rate on personal loan to 5% rather than 7% is taking
two types of views which are emotional view and economic view. To begin with the
