Fostering Entrepreneurship and SMEs to Support Economic Diversification in Oman: Oman

Selected Issues Papers, April 15, 2025

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The transition to a vibrant economy under Oman Vision 2040 and the urgency to develop a more dynamic private sector that can absorb the entry of a young and educated labor force both stress the need to empower SMEs, which play a large role in supporting job creation and nonhydrocarbon activity in Oman.
The note takes stock of the role of small and medium-sized enterprises (SMEs) in Oman, identifies past and current bottlenecks that hinder entrepreneurial dynamism, and documents recent reforms aimed at lowering the costs associated with doing business, facilitating access to finance, and enhancing the integration of SMEs into value chains.
The analysis suggests that policies complementing existing initiatives, through a private sector driven credit guarantee scheme, by adapting insolvency frameworks tailored to SMEs, and supporting linkages between SMEs and multinational enterprises in Special Economic Zones (SEZs), could help maximize long-term gains to SMEs and the broader economy.

SMEs play a large role in supporting job creation and nonhydrocarbon activity in Oman.
Past and current bottlenecks hinder entrepreneurial dynamism (specific bottlenecks described in the full note).
Recent reforms have aimed at:
- lowering the costs associated with doing business;
- facilitating access to finance;
- enhancing the integration of SMEs into value chains.

Complement existing initiatives with a private sector driven credit guarantee scheme.
Adapt insolvency frameworks tailored to SMEs.
Support linkages between SMEs and multinational enterprises in Special Economic Zones (SEZs) to maximize long-term gains to SMEs and the broader economy.

Fostering Entrepreneurship and SMEs to Support Economic Diversification in Oman: Oman — Selected Issues Papers (2025), by Bilal Tabti.