The Use of Artificial Intelligence in Addressing SME Financing Needs in Oman: A Roadmap for Inclusive Growth

Abstract

This comprehensive research paper examines the transformative potential of Artificial Intelligence (AI) in bridging the critical financing gap facing Small and Medium Enterprises (SMEs) in the Sultanate of Oman. As the nation pursues ambitious economic diversification under Oman Vision 2040, SMEs have emerged as essential drivers of employment, innovation, and GDP growth. Yet these enterprises remain chronically underserved by traditional financial institutions due to persistent information asymmetries, insufficient collateral, and prohibitive transaction costs. This study employs a mixed-methods approach, analyzing regulatory frameworks, financial sector data, and global case studies to construct a viable roadmap for AI adoption in Oman's SME financing ecosystem. The paper identifies key AI technologies—including machine learning, natural language processing, and predictive analytics—and their specific applications in alternative credit scoring, automated underwriting, and dynamic risk monitoring. It further proposes a phased implementation framework addressing Oman's unique institutional context, regulatory environment, and digital infrastructure. Critical challenges including data privacy concerns, algorithmic bias, and human capital development are examined alongside practical policy recommendations. The findings suggest that strategic AI deployment, supported by collaborative public-private initiatives and adaptive regulation, can significantly enhance financial inclusion, optimize risk assessment, and unlock the full economic potential of Omani SMEs, thereby accelerating progress toward Vision 2040 objectives.