The countries of the Gulf CooperationCouncil (GCC) have articulated a vision for sustainableeconomic development that highlights the need to diversifythe productive base to reduce dependence on the hydrocarbonsector and create more employment opportunities for theiryoung and growing population. This report analyzes how somekey rules and regulations as well as institutionalarrangements for the enforcement of competition law in theGCC may affect competition in the Small and mediumenterprise (SME) lending markets. The findings of thisreport have several policy implications. This reportidentifies a number of areas where relevant regulations andinstitutional frameworks may impede competition in GCC SMElending markets, and require further investigation. Specifictopics explored in this study include (i) restrictions tocompetition resulting from banking sector rules andregulations; (ii) the exercise of discretion by relevantinstitutions; and (iii) the role of institutionalarrangements for the enforcement of competition lawprohibitions and merger control. This assessment of thecompetition in the GCC’s SME lending markets proceeds asfollows: Chapter 2 presents the SME banking markets in theGCC by discussing the number and ownership patterns ofbanks, and evaluating measures of concentration and marketpower. Chapter 3 presents the results of an initialscreening of selected areas of regulatory intervention thataffect SME lending markets. Chapter 4 evaluates theeffectiveness of competition laws in the GCC countries.Chapter 5 concludes by highlighting areas where furtheranalytical work may be warranted.
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