Rising bank credit signals confidence in Oman’s industrial sector

Oman’s industrial sector is witnessing an advanced stage of growth and expansion, supported by a notable increase in bank credit directed towards industrial activities. This comes at a time when financing provided by the Development Bank recorded a decline during 2025, reflecting structural shifts in industrial financing sources and a growing tendency among investors towards larger-scale commercial and banking finance.
According to data from the 2026 Statistical Yearbook, bank credit extended to the industrial sector rose from approximately RO 2.504 billion in 2024 to around RO 2.918 billion by the end of 2025, registering a growth of about 16.5% compared to 2024. This represents one of the highest growth rates among economic activities.
This increase reflects the growing confidence of the banking sector in Oman’s industrial base, particularly with the expansion of investments in the manufacturing of renewable energy technologies, metals, food processing and pharmaceuticals, in addition to major industrial projects in Suhar, Al Duqm and Salalah.
It also reflects the success of government policies linked to the “Oman Industrial Strategy 2040”, which aims to increase the industrial sector’s contribution to GDP, boost non-oil exports, strengthen local content and attract high-quality investments.
In contrast, data on loan distribution from the Development Bank show a decline in financing to the industrial sector, from approximately RO 91.4 million in 2024 to around RO 71 million in 2025, a decrease of nearly 22%. The number of industrial loans also fell from 1,317 to 1,256 during the same period.
Despite this decline, the industrial sector remains the leading sector financed by the bank, accounting for 33.2% of its total financing portfolio in 2025, compared to 38.9% in 2024. This indicates that the industrial sector continues to hold strategic importance, although changes have occurred in financing volumes and the nature of funded projects.
This decline may be attributed to several factors, most notably the shift of a number of medium and large industrial companies towards direct commercial financing from conventional and Islamic banks, benefitting from improved investment conditions, greater access to flexible credit facilities and lower interest rates.
It may also reflect a strategic shift by the bank towards restructuring its financing priorities, with increased focus on small and medium-sized enterprises and other productive sectors such as mining, tourism and professional services, some of which recorded growth in financing during 2025.
At the same time, the rise in industrial bank credit confirms that the industrial sector has become more attractive and profitable for financial institutions, particularly with the expansion of export-oriented industries, clean energy projects and industrial value chains, thereby strengthening economic diversification efforts.
However, it remains important to maintain complementary roles between commercial banks and the Development Bank, particularly in financing emerging industries and SMEs that may face challenges in accessing traditional commercial financing.
There is also a growing need to develop more diversified industrial financing instruments, including long-term financing, industrial venture capital and technology-focused industrial funds, to support Oman’s transition towards advanced industries and a green economy.
Overall, current indicators suggest that industrial sector continues to strengthen its position as one of the key drivers of economic growth and diversification, supported by increasing banking confidence and expanding industrial investments. This enhances the prospects of achieving the objectives of Oman Vision 2040 in building a competitive economy based on production, exports and innovation.