IslamicFinance.de

Banks are tightening lending conditions for small, private companies in the Gulf - a sign that the region's economies are not escaping damage from the plunge of oil prices. Heavy state spending is keeping economies growing strongly. Rather than borrow domestically or run down their deposits at local banks, governments of GCC countries such as Saudi Arabia are covering much of the budget deficits due to cheap oil by bringing home some funds stored abroad. So for many companies in the Gulf, it's still a borrowers' market for loans - credit is easily available at rock-bottom rates. The exception is small firms that do not have the advantage of shareholding links to governments.