Contribution of Microfinance to

Economic Growth in Oman

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 Table of Contents
CHAPTER: 5 DISCUSSION AND FINDINGS ....................................................................... 3

5.1 Introduction ...................................................................................................................... 3

5.2 Discussion and Findings .................................................................................................. 3

CHAPTER 6: CONCLUSION AND RECOMMENDATIONS ............................................... 9

6.1 Conclusion ....................................................................................................................... 9

6.2 Recommendations ............................................................................................................ 9

6.3 Research Limitation ....................................................................................................... 10

6.4 Future Scope .................................................................................................................. 10

REFERENCES ........................................................................................................................ 11

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 CHAPTER: 5 DISCUSSION AND FINDINGS

5.1 Introduction

Microfinance is refers as a small loan fort a low income group people who have low

financial services and asset. Thus, by using microfinance, it helps to improve the living

standard of the people in order to provide self-employment etc (Ukanwa, Xiong & Anderson,

2018). This section describes the use and role of microfinance in order to ensure the

economic growth in Oman. In addition to this, the present section also exaplin the key

findings and conclusion so that effective recommendation and future existence will b e

recorded in an effective manner.

5.2 Discussion and Findings

Microfinance is refers as baking activity that provide small amount of loan in the form

of credit and saving within 100 million people (Zhuang, Gunatilake, Niimi, Khan, Jiang,

Hasan & Huang, 2009). The current study focus on the various on the ways in which

microfinance can contribute to economic development in Oman through financing the SMEs.

In order to analysis the various data based on the aim of study, mixed research method has

been used which includes 34 of microfinance clients and 22 of microfinance staff for

collecting and determining the result in an effective manner. While making focus on the

results based on the descriptive analysis, it showed the information of demographic ways and

it showed the result that about 51.8% of the respondents in this study were males, 55.4% of

the respondents in this study were married and 58.9% of the respondents in this study were

aged between 26 – 45 years. In addition to this, it was also found that there were about48.2%

of the respondents in this study educated up to graduation and above, 64.3% of the

respondents in this study were employed and 33.9% of the respondents in this study had

experience from 2 – 5 years. While making focus on the income, it showed the results that

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3.6% of the respondents in this study expressed that they have low income from their

business and 26.8% of the respondents in this study expressed that the employment is more

secure and 26.8% of the respondents in this study expressed that they prefer to have two

incomes. While making focus on the loan amount by the respondents, it showed that about

39.3% of the respondents in this study obtained a loan of OMR 11,000 – 50,000 and 53.6%

of the respondents in this study expressed that the interest on their loan was 2.1 – 10% and

33..9% people believe that the loan interest rate is fair and grace period is 7 to 11 months.

While making focus on the impact of loan, about 46.4% of the respondents in this

study expressed that since the loan there are changes in their level of living standards and

50.0% of the respondents in this study expressed that the there are changes in their level of

living standards in other consumption areas. Furthermore, top deter mine the result based on

the employment security, it showed the result that 26.8% people were in favour that

employment is more secure because of the loan by giving positive result as 17.9% of the

respondents believe that rated 5 for their agreement in the loan increase their living standard.

While making focus on the purpose of taking loan, it showed the results that about 60.7% of

the respondents have taken their loan for starting a new business and about 53.6% of the

respondents in this study expressed that they have 2 – 5 employees in their existing business.

In addition to this, to determine the acquirement of the purpose by the people for taking the

loan showed that 7 6.8% of the people believe that their purpose have been acquired

successfully by taking the loan. Hence, it can be said that loan helps to increase the living

standard by gibing better employment opportunity such as new business starting etc in an

effective manner. In respect to this, there were about 57.1% of the respondents in this study

expressed that they used the loan for consumption purpose. Hence, it can be concluded that

loan is not only suitable for the business purpose but also suitable for consumption purpose of

the people.

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 While making focus on other service from AIRaffd Fund other than the loan, there

were about 66.1% of the respondents in this study expressed that any other services from

AIRaffd fund other than the loan also available and there were 53.6% of the people who

highly believe the majority of the business highly follow the AI rule in their successful

operation. In addition to this, the result based on requirement of training and development for

successful implement of their business showed the result that there were 25% of the people

highly against with the statement because they did not receive any kind of training and

development programs which is beneficial for them in order to successfully run their

business. While making focus on the negative impact on taking loan, there were 26.8% of

the respondents disagreed that, the loan that they receive has improve their living standards

and 30.4% of the respondents in this study disagreed to some extent by starting their own

business they created their own career. Hence, it can be concluded that buy taking the loan

make positive as well as negative impact because it create more burden to the people so that

living standard of the people will not be improved in most of situation (Taiwo, Agwu &

Benson, 2016). In addition to this, it w as also found that AIRaffd fund provides opportunity

to youth for taking the loan as 41.1% of the respondents in this study expressed that AIRaffd

fund provides loans for youth.

In addition to this, it was also found that AIRaffd not only provide the loan but it also

helps the youth by giving business advice. As per the current research and collected facts, it

was found that 8.9% of the respondents in this study expressed that AIRaffd fund provides

business advice and 41.1% of the respondents also shared their review that AIRaffd fund also

provides business skills training. Hence, it can be said that as compare to loan, AIRaffd is

more suitable and beneficial for the people (Saqib, Baluch & Udin, 2017). While making

focus on the various kinds of financial services offer, there is various data showed different

result that 37.5% of respondents were in favour of business loan, 1.8% was in favour of

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personal loan and 1.8% of the respondents in this study expressed that they currently offer LC

services. While making focus on the target of the fund which showed the result that 21.4% of

the respondents in this study expressed that their funding target is unemployed youths. On the

other hand, there were about 14.3% of the respondents in this study expressed that their

funding target is females and 14.3% of the respondents in this study expressed that their

funding target is owners of existing business. In addition to this, there were 12.5% of the

respondents in this study expressed that their funding target is low income. Hence, it can be

said that the main target of the fund is low income people, females, unemployed youth and

owners of existing business. While making focus on the charges of interest rate over the loan

various result showed the different result. As per the collected data, it was found that about

41.1% of the respondents in this study were charging 2% interest for their loans. On the other

hand, there were 39.3% of the people highly believe and in favourer with AIRaffd fund that

helps to improve and increase the living standard of the clients (Sani, Mohd-Khan, Noor &

Saifoul, 2018). While making focus on the role of AIRaffd fund for the growth of Oman’s

economy, it was found that there were about 57.1% of the respondents in this study agreed

that AIRaffd loans could contribute to the growth of small medium enterprise in Oman and

58./% of the respondents in this study agreed that AIRaffd could contribute to reduce

unemployment in Oman. Hence, it can be said that AIRaffd is better and more suitable as

compare to loan for the growth of Oman‘s economy because it not also provide loan but also

provide suggestion and advice for the successful implementation of the business. In addition

to this, to make focus on default in repayment situation showed the responds form the people

that 46.4% of the respondents in this study agreed that their customs default in repaying their

loans and 35.7% of the respondents in this study agreed that their customers default in

repaying their loans. Hence, it can be said that due to customs and over burdened rule also

disable the people to repay the loan amount in an effective manner (Oni & Daniya, 2012).

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 In order to make a chi-square test for testing the hypothesis and reliability of the

various variables used in the study, it showed the various results. While analysing the

significant difference in agreement of the respondents regarding the loan they have taken has

improved their living standard, a chi square test for equal proportions was applied by using

SPSS. The chi square value was 4 and its corresponding p value was 0.135>0.05. Since the p

value was more than 0.05, it could be concluded that, there is no significant difference in

agreement of the respondents regarding the loan they have taken has improved their living

standard (Obaidullah & Khan, 2008). In addition to this, to check the significant difference in

agreement of the respondents regarding the education and training that have been provided

enabled them to success in their business, it showed the chi square value was 3.107 and its

corresponding p value was 0.54>0.05. Since the p value was more than 0.05, it concluded

that, there is no significant difference in agreement of the respondents regarding the

education and training that have been provided enabled them to success in their business.

Test 3 showed the significant difference in agreement of the respondents regarding the loan

that they received has improved their living standards, which presented the chi square value

was 4 and its corresponding p value was 7.036>0.05. Since the p value was more than 0.05, it

concluded that, there is no significant difference in agreement of the respondents regarding

the loan that they received has improved their living standards (Ibrahim, 2015, March). Same

as to check the significant between agreement and starting of new business showed chi

square value was 9.714and its corresponding p value was 0.046<0.05. Hence, there is a

significant difference in agreement of the respondents regarding by starting their own

business they created their own career. While making test 5 to check the significant between

AIRaffd services could improve the living standards of their clients, showed the chi-square

value was 3.571 and its corresponding p value was 0.168>0.05. Hence, it can be concluded

that no significant difference in agreement of the respondents regarding AIRaffd services

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could improve the living standards of their clients (Gulani & Usman, 2012). Same as test 6

check the significance between AIRaffd Loans could contribute to the growth of small

medium enterprise in Oman in which the value of chi square was 1.143 and its corresponding

p value was 0.285>0.05 that showed no significant difference in agreement of the

respondents regarding AIRaffd Loans could contribute to the growth of small medium

enterprise in Oman. In test 7, the chi-square value was 1.786 and its corresponding p value

was 0.181>0.05 and showed the result that there is no significant difference in agreement of

the respondents regarding AIRaffd could contribute to reduce unemployment in Oman. In

test 8, chi square value was 9.571 and its corresponding p value was 0.008<0.05 which

showed the result that there is a significant difference in agreement of the respondents

regarding their customers are default in repaying their loans. At last, test 9 also showed the

chi square value was 4 and its corresponding p value was 0.000<0.05 which means there is a

significant difference in agreement of the respondents regarding their customer likely to

default in repaying their loans. Hence, it can be said that loan does not increase the living

standard for the people but it provide financial help which are re-paid by the customers

within limited period of time (Eniola, 2014).

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 CHAPTER 6: CONCLUSION AND RECOMMENDATIONS

6.1 Conclusion

As per the detailed information, it can be concluded that the idea of microfinance was

introduced in Oman thru the Sanad programme in 2001.From and monetary angle, the idea of

intentional financial resource provision promotes economic increase through poverty

comfort, entrepreneurship result in better living well-known, more financial savings and

better investment and higher employment. Therefore, microfinance may be seen as an

instrument that is socially accountable for selling effectives development. The principle roles

of AIRaffd are supplying microfinance facilities for youth (Dechant & Lamky, 2005). In

some other way, it's far encouraging unemployed young people to start their own companies

and create their very own jobs in preference to looking forward to the authority’s

employment but it also have some limitations so that it is essential for the customers to take

right decision based on the loan scheme.

6.2 Recommendations

In the Omani’s market, the competition is very high especially as it is controlled by

expatriates, who can prevent Omani national from entering it. However, the main objective of

the research is to explore the role of microfinance in the economic growth. In respect to this,

to analysis the role of microfinance for the growth of Oman’s economy, it is essential to

follow some recommendations which are as follows:

 It is essential for the government to make a marketing tie up so that it will help by

procuring the requirement from SHGs/ Microfinance borrowers.

 It is also essential to develop New suitable loan policy prepared by various companies

on Micro-insurance should be introduce (Belwal, Tamiru & Singh, 2012).

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  Training and knowledge dissemination is the need of the hour and microfinance

information exchange should be established by NGOs/Other stakeholders with the

active support of the government

6.3 Research Limitation

The researcher had faced a lot of problems to conduct the research study in a proper

manner. A major issue was to collect data, facts, and figures from different sources. The

different sources of information were limited in nature. This laid down hindrances in the

conduction of research study in a confined manner. The researcher also had to depend on the

respondents for the collection of more information. The respondents did not seem to be

participative enough. The respondents were found to be varied in nature. Some of the

respondents actively participated and provided their valuable feedback while others did not

respond with much interest. Moreover, there was limited time for the conduction of the

research study process. This created a lot of difficulties for the researcher the carry out the

research process in an effective manner (Ahmed, Mohieldin, Verbeek & Aboulmagd, 2015).

6.4 Future Scope

The research was necessary to be carried out to know about the different factors that

were responsible for contribution of microfinance to economic growth in Oman. The

identification of the reasons will enable to resolve in an appropriate manner so that customers

perception and services given by banks could be improved significantly. The study will also

help to understand the different difficulties that are faced by the customers in order to

accomplish a task or complete loan transaction in Oman. This will ensure that the difficulties

faced by these customers could be sorted out in an effective manner so that the conditions of

customers and banks and Oman lending system could be improved (Ahmad, 2011).

Moreover, the research will also help the other scholars and researchers to carry out the study

process in an effective manner by taking references from the current research study

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