TBY talks to Shahin Mohammed Ahmed Al Balushi, CEO of Oman ORIX Leasing Company (OOLC), on developing the SME sector, efforts to diversify the economy away from oil, and tapping into growth segments.

Shahin Mohammed Ahmed Al Balushi
Shahin Mohammed Ahmed Al Balushi served the government of Sultanate of Oman for 14 years prior to joining Oman ORIX in January 1999. He has been with Oman ORIX for more than 15 years, serving the organization in various key positions. Besides working in marketing and sales he was also instrumental in reviving recovery, legal, and credit administration functions of the organization prior to taking up the mandate of CEO in June 2013. He has a BA and holds an MBA from University of Strathclyde, Scotland.

What advantages does leasing an asset through OOLC offer to your SME customers?

Oman is a developing economy and as such there is a need to support the SME sector. Due to our expertise, SMEs find it easy to transact with non-bank financial institutions (NBFIs) as compared to the banks. The government of Oman has taken a number of initiatives to develop this segment and we feel that it offers a number of growth opportunities for all the NBFIs. The biggest advantage of dealing with OOLC is quick turnaround time, easy documentation, and a strong network of six branches in addition to the HO in Muscat.

How do you work to remain a competitive alternative to banks as a NBFI?

OOLC has developed its expertise in the SME segment and we provide comprehensive solutions for our customers. At the same time, our pricing is competitive and we have developed good relations with commercial and construction equipment dealers to source referral business. As mentioned, our other advantages include a strong branch network and swift response time.

How does OOLC work to mitigate the risks involved in these investments?

OOLC has laid down prudent credit policies and is involved in the financing of fixed moveable assets such as vehicles, construction equipment, and plant machinery. Post-dated checks are obtained for all the transactions and the know-your-customer (KYC) principle is followed to the letter.

What are some trends in Oman that are driving business for OOLC?

Due to the initiatives taken by the government the corporate sector has shown prominent growth over the last few years. There are ample opportunities for setting up manufacturing facilities in the industrial free zone areas. This provides opportunities for NBFIs to finance plants and machinery in this segment. The SME sector continues to prosper in Oman, providing opportunities for financing of commercial/construction assets and vehicles. Oman is a young population and there is a need for financing of vehicles to both locals and expats. The government is taking steps to develop the tourism industry and a number of initiatives to attract tourists have been taken. The development of various ports such as Sohar and Duqum provide financing potential to downstream companies. The bulk of our corporate business is comprised of financing to SMEs, which represents more than 60% of our portfolio.

Can the renewed focus on growing the non-oil sector in Oman work to increase your business as more companies look to obtain new machinery or automobiles?

The government continues to take steps to diversify the country's economy and develop the non-oil sector. Some of the sectors in focus include manufacturing, tourism, transportation, and logistics. This will not only generate employment for the youth in both the public and the private sectors but also encourage establishment of downstream companies. This in turn will invigorate the economy and provide financing opportunities to these segments. Requirements can include financing for plants and machinery, commercial or construction assets, vehicles, as well as consumer financing to individuals.

What are your expectations for OOLC over the next 12 months?

We expect to achieve our business targets and have put our strategy in line with local market conditions. We will continue to grow our portfolio both in the corporate as well as the retail segment. We are currently working on geographic expansion and expect the economy to continue to grow at a reasonable pace.