Latest news with #FintechSaudi
Arab News
27-04-2025
- Business
- Arab News
Saudi Arabia proposes lower bank guarantee requirements for finance licenses
RIYADH: Saudi Arabia is considering steps to lower the bank guarantee requirements for financial companies seeking licenses, part of efforts to bolster the Kingdom's financial sector. In a statement, the Saudi Central Bank, known as SAMA, said it has launched a public consultation on a draft update to the Finance Companies Control Law through the National Competitiveness Center's 'Istitlaa' platform. The draft proposes regulatory changes aimed at supporting sector growth and stability. The draft update highlights SAMA's ongoing efforts to support the financial sector's stability and growth by increasing the aggregate financing amount offered by a company. 'The update includes easing the requirements for companies applying for licenses by reducing the bank guarantees required to submit licensing applications,' said SAMA. It added: 'The update also includes a revision of relevant provisions stipulated by related parties and outlines cases of expiration of licenses granted to finance companies.' Under the draft, the minimum bank guarantee would be cut to 20 percent of the minimum required capital, compared to the current requirement of 100 percent, according to the regulatory proposal reviewed by Arab News. This change is designed to enable finance companies to provide more liquidity and raise their contribution to Saudi Arabia's gross domestic product. The draft also introduces clearer criteria for approving new activities by finance companies, requiring applicants to demonstrate adequate risk management frameworks, sufficient financial resources, and compliance with governance standards. It defines specific cases where licenses can be revoked, including prolonged inactivity or violation of regulatory obligations. The public comment period will be open for 30 days, after which SAMA will assess feedback before finalizing the new regulations. Strengthening the financial sector is a key priority under Saudi Arabia's Vision 2030. As part of this effort, the Kingdom launched the Financial Sector Development Program to transform its stock exchange into a strong, internationally competitive investment platform. In 2018, Saudi Arabia also introduced the Fintech Saudi initiative, helping the Kingdom emerge as a leading fintech hub in the Middle East by fostering innovation and expanding digital payments. SAMA has played a critical role in these initiatives, implementing progressive regulations, including a regulatory sandbox for supervised testing of advanced technologies and specialized licenses for fintech businesses.
Arab News
26-04-2025
- Business
- Arab News
Saudi Arabia's financial transformation is Vision 2030 success story
Saudi Arabia has undertaken several reforms over the last decade, most of which are the byproduct of Vision 2030, which have transformed the financial sector and businesses, as well as society as a whole. A key driver of this transformation was the implementation of the Financial Sector Development Program and the emergence of the Saudi Exchange, or Tadawul, as a global market. The FSDP was introduced in 2017 as a part of Saudi Arabia's Vision 2030 to boost the capital market. The plan aims to transform the stock exchange into a robust international investment platform. It also aims to improve trading infrastructure, settlement processes, and market capitalization to over $3 trillion. This has led to increased online platforms, fintech capabilities, and transparency. Tadawul's inclusion in the MSCI Emerging Markets Index in 2019 further solidified its global position. Another major reform was starting fintech innovation. Since the launch of the Fintech Saudi initiative in 2018, Saudi Arabia has been a leading fintech hub in the Middle East, fostering innovation and widespread digital payments. The Saudi Central Bank has facilitated this growth through progressive laws. This includes a regulatory sandbox for supervised testing of advanced technologies, specialist licenses for fintech businesses, and the availability of banking infrastructure and Application Programming Interfaces. Moving to green finance, Saudi Arabia is focusing on financial sector innovation and sustainability, implementing green financing programs as a part of its Vision 2030 objectives. Since 2022, the country has promoted environmentally friendly investment and finance green projects through sustainable laws and by issuing green bonds. These proactive initiatives have made Saudi Arabia a key player in the global transition to a more environmentally responsible economic model. Saudi Arabia has also increased its accessibility and appeal to foreign investors by connecting the market to the global financial system. This strategic policy change has led to a significant increase in foreign capital inflow, indicating global trust in the stability of the Kingdom's financial system. When it comes to developing the Saudi debt-financing market, the Kingdom established the Debt Management Office to manage its debt while balancing financial policies and risks. The DMO was restructured into the independent National Debt Management Center, which collects data, negotiates arrangements, implements hedging measures, manages investor relations for public debt, and ensures good credit ratings. This specialized body has improved public financial controls and maintained a sound fiscal position, thereby enhancing Saudi Arabia's financial standing. Since the launch of Vision 2030, Saudi Arabia has been leading the fintech revolution with over 226 fintech enterprises, thanks to its well-functioning telecommunications sector and heavy investment in infrastructure. 'A key driver of this transformation was the implementation of the Financial Sector Development Program and the emergence of the Saudi Exchange, or Tadawul, as a global market.' Dr. Yaseen Ghulam STC Bank, the Saudi Digital Bank, and SARIE are leading the way in consumer digital banking and payment systems. Digital banking helps customers save time, reduce transaction costs, and promotes competition, leading to increased economic activity and growth. With consumer consent, these facilities allow permitted third-party providers access to financial data, fostering competition and innovation in the financial industry. Digital wallets, smartphone apps, and online banking have become crucial elements of the current Saudi banking experience. Opening a bank account can be done online, especially beneficial in rural areas. Customers can use banking apps on their phones or computers to register and open an account in minutes. Mobile banking has boosted financial inclusion by providing credit, insurance, and financial services to previously marginalized individuals and regions. Saudi Arabia's Vision 2030 and the FSDP aim to boost financing for over 1.3 million small- and medium-sized companies by increasing the banking system's SME financing ratio to 11 percent by 2025. This is supported by institutions including Monshaat, Saudi Venture Capital Company, the Esterdad Initiative, and loans facilitated through the Indirect Lending Initiative. The government recommends financial institutions allocate 20 percent of their loan portfolios to the SME industry. Monshaat's various schemes, along with the fintech revolution, are also contributing to increased funding for SMEs. The Public Investment Fund is also improving SME funding, with Saudi Aramco's Taleed program providing over SR3 billion ($798 million). These funding channels were made possible by government reforms and support for smaller businesses to help improve diversification of the economy, which is the main objective of Vision 2030. Another important development has been the rise in financial literacy. The Financial Literacy Strategy, a key component of Vision 2030, aims to enhance this aspect in the Kingdom. The Financial Literacy Entity within the FSDP has been instrumental in achieving this goal. Fintech companies such as Darahim and Fatafeat are working to boost financial literacy. Saudi Arabia's Ministry of Education has mandated the inclusion of a Financial Knowledge course in school curricula. In addition, Thameen and Smart Investor are awareness initiatives run by the Capital Market Authority. A report issued in 2023 from the Saudi Central Bank indicates that financial literacy has increased, with 38 percent of adults now understanding basic financial concepts. Future initiatives include removing cultural barriers and providing religious context. Access to financial institutions, workshops, and mentorship programs is crucial in rural areas. Investing in regional financial literacy materials, using technology for Arabic online resources, and forming partnerships with financial institutions can help overcome barriers. Collaboration with local institutions, Islamic banks, and experts can also establish customized financial education channels. • Dr. Yaseen Ghulam is an associate professor of economics and director of research at Al-Yamamah University in Riyadh.
Zawya
31-01-2025
- Business
- Zawya
Debt crowdfunding platform Lendo raises $690mln facility led by JP Morgan
Riyadh: Debt crowdfunding platform in Saudi Arabia Lendo has secured a $690 million warehouse facility, equivalent to SAR 2.60 billion, led by J.P. Morgan. The transaction is supported by Fintech Saudi, underscoring the growth in Saudi Arabia's fintech sector and the vast opportunity in SME financing in the economy, according to a press release. The facility is expected to contribute to an increase in job creation in the Kingdom, demonstrating Lendo's commitment to domestic economic growth and employment. CEO and Co-founder of Lendo, Osama Alraee, said: 'This landmark facility represents a transformative moment for Lendo and the Saudi fintech ecosystem… The strong backing from global financial institutions such as J.P. Morgan validates our innovative approach to SME financing and positions us to expand our impact in the Saudi market significantly.' Alraee concluded: 'This facility will accelerate our mission of boosting SMEs growth while contributing to the Kingdom's Vision 2030 goals.' J.P. Morgan's facility will be strategically deployed to increase Lendo's lending capacity, introduce more innovative products, and expand Lendo's SME coverage in the Kingdom. The development aligns with Saudi Vision 2030's goal of increasing SME lending from 4% in 2018 to 20% by 2030. Co-Head of Northern European ABS at J.P. Morgan, George Deves, cemented the collaboration with Lendo, noting: 'A strong and fast-growing SME sector is vital for the local economy and this financing will help support the strategic initiative to boost SME lending in Saudi Arabia.' The facility also signals the growing confidence of international investors in Saudi Arabia's fintech sector and its regulatory framework. It is worth noting that Lendo has raised two investment rounds to date. The company's last $28 million Series B investment round was led by Sanabil Investments, a wholly owned subsidiary of Saudi Arabia's Public Investment Fund (PIF).
Arab News
30-01-2025
- Business
- Arab News
Saudi crowdfunding platform Lendo secures $690m warehouse facility led by J.P. Morgan
RIYADH: Lendo, a debt crowdfunding platform in Saudi Arabia, has secured a SR2.6 billion ($690 million) warehouse facility, with J.P. Morgan serving as the lead arranger. According to an official statement, the facility will support increased job creation within the Kingdom, underscoring Lendo's commitment to fostering domestic economic growth and employment opportunities. Endorsed by Fintech Saudi, this achievement highlights the rapid expansion of Saudi Arabia's fintech sector and signals the substantial potential for small and medium-sized enterprise financing within the economy, it added. The initiative also aligns with Saudi Vision 2030, which aims to raise SME lending from 4 percent in 2018 to 20 percent by 2030. 'This landmark facility represents a transformative moment for Lendo and the Saudi fintech ecosystem,' said Osama Alraee, CEO and co-founder of Lendo. 'The strong backing from global financial institutions such as J.P. Morgan validates our innovative approach to SME financing and positions us to significantly expand our impact in the Saudi market. This facility will accelerate our mission of driving SME growth while contributing to the Kingdom's Vision 2030 goals.' The statement said the facility will be strategically allocated to enhance Lendo's lending capacity, introduce innovative financial products, and broaden the company's coverage of SMEs across the Kingdom. George Deves, co-head of Northern European Asset-Backed Securities at J.P. Morgan, remarked: 'We are pleased to collaborate with Lendo on this landmark transaction. A robust and rapidly expanding SME sector is crucial to the local economy, and this financing will contribute to the strategic goal of boosting SME lending in Saudi Arabia.' Moreover, the deal underscores the growing confidence of international investors in the Kingdom's fintech sector, particularly in the strength of its regulatory framework. Lendo has successfully completed two rounds of investment to date, with its most recent Series B funding round, raising $28 million, led by Sanabil Investments, a wholly owned subsidiary of Saudi Arabia's Public Investment Fund.
