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Managing risks and seizing opportunities in Oman’s financial sector

22 Jan 2025

Interview with Moosa al Lawati, Head of Finance, Taageer Finance

Muscat – In this interview, Moosa al Lawati, Head of Finance at Taageer Finance Company, shared insights into the current economic and regulatory landscape for non-banking finance companies (NBFCs) in Oman. He discussed the challenges and opportunities faced by NBFCs, with a particular focus on liquidity management, the evolving role of digital transformation, and the growth of SMEs in Oman.

How do you perceive the current economic and regulatory landscape for non-banking financial companies (NBFCs) in Oman? What are the key challenges and opportunities NBFCs face in this environment?

Oman’s macroeconomic environment is expected to remain stable, with strong GDP growth anticipated in 2025, driven by higher oil production and robust growth in non-hydrocarbon sectors. However, challenges persist, particularly due to volatile oil prices and geopolitical conditions. One of the major challenges for NBFCs in Oman is liquidity availability, as they predominantly rely on funding from banks and corporate investors.

With the strong economy, NBFCs are likely to experience growth in their portfolios. The government is also focusing on the growth of non-hydrocarbon sectors, especially small and medium-sized enterprises (SMEs). One of the key initiatives supporting SMEs is the Future Fund Oman. As NBFCs are well-positioned to provide value-added products to the SME sector, where credit penetration is still very low, the growth of the country’s SME sector will be highly beneficial for them. The government’s initiatives towards a digital economy will also create both opportunities and challenges for NBFCs. These companies will need to adopt digital initiatives to remain competitive in this evolving environment.

As Head of Finance at a non-banking finance company, how do you approach managing credit risks and liquidity, particularly in times of economic uncertainty?

At Taageer Finance, we have a robust risk management framework in place to mitigate various risks faced by the company, including credit and liquidity risks. We have comprehensive policies to assess and manage these risks. Our management committees review these risks periodically and provide guidance to the relevant departments on the appropriate course of action.

As Head of Finance, I ensure that the risks remain within the limits set by the board of directors. We play a crucial role in liquidity management and cost control by strictly implementing relevant policies. Additionally, we ensure that the company maintains adequate provisioning against its loan portfolio to protect against future credit risks. As part of our risk review process, we also conduct stress tests to prepare for any potential economic uncertainty.

Digital transformation is reshaping the finance sector. How do you see it affecting the finance function within your industry, and how is your company adapting to these technological changes to stay competitive?

At Taageer Finance, we have developed our own in-house Loan Management System, which integrates all functions within the company. Recently, we also automated our B2B payments. A significant portion of the processes within the finance function is already automated, and we are working towards the full automation of the department.

Finance-focused events, such as the Oman CFO Forum held in September, play a significant role in fostering collaboration among industry leaders. In your opinion, how do these events contribute to strengthening the finance community? What topics or themes should be prioritised in future forums?

These events are vital for bringing finance professionals together on one platform to discuss the roles and challenges faced by the finance function, especially the digital transformation of business activities. In future events, the role of finance as a business partner in a company’s growth should be a key focus. As a follow-up to the forum, we could establish committees that meet regularly to share knowledge. Potential areas for discussion could include the role of artificial intelligence in finance, among others.

For aspiring finance leaders, what advice would you give to help them navigate the evolving role of finance leadership? What skills or qualities do you believe will be essential for future CFOs?

Aspiring CFOs should not only act as business partners within the organisations they work for, but they should also be prepared to lead digital transformation projects. They must stay informed about developments in the finance field and how technology is reshaping their profession. Additionally, they should network within the industry and learn from other professionals in their field.

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