ODB reduces loan collateral requirements

The Board of Directors of the Oman Development Bank (ODB), in its last meeting, has decided to reduce the requirement level of collaterals requested for the Bank’s loan. ODB will relax the parameters of the internal rating model it is using to allow a uniform and across the board reasonable level of lower collaterals for a same level of risk. This methodical approach permits a fairness among customers and a acceptable compromise between both necessities of sustainability of the Bank and more growth to SME finance. The internal rating model ODB is using was developed since 2007 to compute rigorously the expected losses of loans provided and computes the right level of collateral, based on the merits of each project, and in line with Basel 2 guidelines.