Omani consumers have expressed a strong appetite for Islamic finance with a rapid take-up of banking products expected within the first 12 months of being launched.
These are key findings published yesterday from Oman’s first independent market study, entitled ‘Islamic Finance in Oman – Sizing the retail market’.
The report was independently commissioned and published by IFAAS (Islamic Finance Advisory & Assurance Services), the international Islamic Finance consultancy.
The report, analyses the retail market for Islamic finance in Oman across all sectors of the financial market, including banking, finance and insurance. It examines the current behaviour of consumers and measures future market trends to gauge the real potential of Islamic finance in Oman.
The report fulfils the demand for empirical data that new and existing players need to develop their business plans using robust scientific information. Key findings from the report reveal: About 85 per cent of consumers in Oman expressed an interest in Islamic finance products, of which 59 per cent were very interested and 26 per cent quite interested.
Nearly 70 per cent of consumers in Oman anticipate opening an Islamic savings account in the next 12 months with half (35 per cent) expecting to do so within three months of one becoming available.
About 77 per cent of consumers in Oman expect to take out Islamic financing (loans) within the next 1-2 years.
‘Islamic Finance in Oman – Sizing the retail market’ also found that currently 86 per cent of consumers in Oman have some kind of conventional banking products , of which 60 per cent declared to be ‘bothered’ about using products that are based on Riba (interest).
This further re-enforces the strong potential for retail Islamic finance in Oman, inferring that a high proportion of consumers engaging in financial activities are likely to switch to Shariah compliant alternatives when they become available. The report summarises its findings with several conclusions including:
The introduction of Islamic Finance in Oman is anticipated to change the country’s financial landscape over the next decade with far reaching positive effects for the overall economy.
The retail market will see a shift from conventional banking and a change in the savings behaviour leading to sizeable ‘new’ money.
Commenting on the findings, Farrukh Raza, managing director, IFAAS said, “The findings from ‘Islamic Finance in Oman – Sizing the retail market’ demonstrate that the growth from Islamic Finance has the potential to be bigger than currently expected.
The major challenge for decision makers is to ensure that their early critical decisions are based on accurate market information to ensure long term success. IFAAS’ report and findings have proved invaluable for many institutions considering their next move.” .
source: Times of Oman