Shutterstock/H1N1by Kudakwashe Muzoriwa
The Saudi Arabian Monetary Authority (SAMA) has set minimum capital limits for companies looking to offer small consumer and business loans.
The Saudi central bank stated that the minimum paid-up capital for companies practicing microfinancing is SAR 20 million and SAMA can raise or lower the minimum capital according to market conditions.
Additionally, the central bank also said that the total amount of finance granted to the beneficiary of the microfinance consumer company may not exceed SAR 50,000.
SAMA stated that the issuance of these rules is part of the regulator’s efforts to enhance financial inclusion by providing more financing products to meet consumer’s needs in line with the central bank’s role in enhancing financial stability as well as supporting the growth and economic development.
The central bank said that it seeks through these rules to achieve several objectives such as attracting a new segment of investors and companies with medium capital to work under its supervision.
Similarly, microfinance companies are also required to provide consumer finance products that meet the needs of consumers, within a supervisory framework that ensures consumer protection, through standards and requirements for the protection of consumer rights.