Oman’s Capital Market Authority (CMA) is exploring new fintech initiatives including implementing distributed ledger technology for the Takaful and insurance sector as well as introducing its own crowdfunding platform, a senior official confirmed.
These digitalization measures come on the back of a raft of other initiatives including introducing an e-platform for virtual meetings, amid the global COVID-19 pandemic.
“We do recognize the current situation and challenging times we are facing,” Kemal Rizadi Arbi, an expert and advisor at the CMA, shared during the first day of the IFN Oman OnAir Forum 2020. “A lot of digitalization has been done on the CMA side – we are also looking at using blockchain technology for insurance and Takaful.”
Kemal also revealed that the regulator is working on its own crowdfunding platform, designed to improve access to financing for SMEs. The platform will accommodate both Islamic and conventional financing mechanisms. Both equity crowdfunding and peer-to-peer financing models are being considered and likely to be implemented.
“[SME crowdfunding platform] is something we would like to focus for the coming year – this is in line with Oman Vision 2040 to promote SMEs as the next engine of growth, and is part of Oman’s diversification plan,” explained Kemal.
Diversification is a driving theme of the regulator’s strategic measures: the CMA (and the government) has embarked on various initiatives to broaden the investor base with new instruments. The government’s decision to open its sovereign Sukuk program to retail investor this year is an example of the Sultanate bringing retail investors into the fold as part of a wider financial inclusion ambition.
The CMA also recently launched a targeted market consultation for an exchange-traded fund (ETF) policy framework which also covers Islamic ETFs, IFN has learned. The draft guidelines have been crafted to introduce ETFs to the market as a means to provide more liquidity and to serve as an alternative investment platform for individual investors.
As with its global peers, Oman’s economy is expected to contract sharply this year due to the novel coronavirus pandemic and weak oil prices, which would continue to strain the Sultanate’s fiscal and external deficits. Fitch Ratings in August downgraded the country’s rating one notch to ‘BB-’ with a negative outlook; despite that, industry players are cautiously optimistic that the Islamic banking and finance sector would ride out the storm, posting moderate growth, and support the Omani economy.
To watch the proceedings of the IFN Oman OnAir Forum 2020, click here.