Muscat: BankDhofar, the second-largest bank in the Sultanate of Oman by branch network, and Development Bank, a government-established institution supporting Oman’s business community since 1976, have signed a strategic Memorandum of Understanding (MoU) to collaborate on the issuance and discounting of Letters of Credit (LCs) for Development Bank clients.
The partnership aims to enhance access to trade finance for Omani SMEs, start-ups and development-focused enterprises by streamlining processes to ensure faster LC issuance, improved service quality and adherence to regulatory standards.
“This collaboration directly addresses a critical gap in our market – enabling smaller enterprises to compete on the global stage with the same trade finance tools available to larger corporations,” said Hussain Al Lawati, CEO, Development Bank. “By combining Development Bank’s sectoral expertise with BankDhofar’s strength in trade finance and extensive correspondent network, we’re creating a gateway for SMEs and start-ups to access global markets more efficiently than ever before.”
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The MoU represents an important step in aligning commercial banking expertise with developmental finance objectives, ensuring greater financial inclusion for high-potential but underbanked segments of the economy. Under the agreement, both institutions have committed to exclusive discussions to evaluate the structure, scope, and operational framework of the proposed LC and related guarantee mechanisms.
Development Bank, established by the government in 1976, has been a steadfast partner to Oman’s business community, offering a suite of tailored financial products and services designed to support the development of a fairer, more sustainable economy. The bank empowers Omani businesses at every stage – from start-ups seeking seed capital to established enterprises pursuing growth financing.
BankDhofar brings extensive trade finance expertise to the partnership, recognized by publications including Global Trade Review and Global Finance as “Best Trade Finance Bank in Oman – 2024.” “Best Bank for Corporates in Oman – 2024” by Euromoney The bank’s investment-grade credit standing and compliance with international trade protocols (UCP 600, SWIFT) ensure its Letters of Credit are widely accepted across Asia, Europe and the MENA region, particularly in energy, construction, food, machinery and industrial goods sectors.
Leveraging robust core banking systems and global correspondent banking relationships, BankDhofar provides secure and efficient trade services critical for importing capital equipment, raw materials and strategic goods. The bank also offers Shariah-compliant trade finance instruments and participates in ECA-backed structures to support diverse client needs.
BankDhofar operates under a stringent risk and compliance framework, fully aligned with Central Bank of Oman’s regulations. Its practices in KYC, AML and trade document verification strengthen confidence among international trading partners. The collaboration with Development Bank on de-risked LC issuance further enhances its role in supporting Oman’s trade and development ecosystem.
This MoU complements BankDhofar’s broader efforts to support government-led initiatives in SME development, import substitution and infrastructure growth, reinforcing its position as a key enabler of Oman’s Vision 2040 economic diversification strategy.
