While he denied the existence of a liquidity problem in the Saudi market
Al-Hamza: Our goal is for small businesses to continue to perform, especially in the field of employment
The Director of the Supervision Department emphasized in charge of the institution of finance companies by the Saudi Arabian Monetary Mohammed bin Abdullah Al-Hamza Foundation was keen to economic stability, and to work on the sustainability of small enterprises and medium-sized performance at present, and the future, it has been allocated for this purpose 50 billion riyals to help these facilities within a group Programs implemented by banks and finance companies.
This was mentioned during the direct meeting organized by the Asharqia Chamber represented by the Finance Committee (Wednesday 6/5/2020) under the title (Monetary Agency Initiatives to Reduce the Financial and Economic Impact on the Private Sector) and moderated by Zaid Al-Yaish, the Chairman of the Committee, that the Foundation is based on its role in activating monetary policy tools And enhancing financial stability, including enabling the financial sector to support private sector growth. Within the framework of supporting the state’s efforts to combat the Corona Virus (COVID-19) and mitigate its expected financial and economic effects on the private sector, especially on the small, medium and micro enterprises sector, it worked on preparing several programs amounting to about (50) billion riyals It aims to support the private sector and enable it to play its role in promoting economic growth.
He added that the Foundation for this purpose has carried out a number of programs aimed at supporting the financing of small and medium enterprises, aimed at mitigating the effects of precautionary measures to combat the Coronavirus on this sector, in particular reducing the burden of fluctuating cash flows and supporting the working capital of this sector and enabling it to grow during the next period and contribute In support of economic growth and maintaining employment in the private sector, of these (deferred payments program), an amount of (30) billion riyals has been deposited in favor of banks and financing companies, in exchange for deferring the payment of dues to the financial sector (banks and financing companies) for a period of six months at The small and medium-sized enterprises sector, starting from the date of March 14th, confirming that banks are ready to place other deposits if necessary.
He went on to say that one of the programs adopted by the Foundation to confront the pandemic, and for the aforementioned goal is (the lending financing program), and secured financing, the Foundation has provided cash liquidity amounting to 13 billion and 200 million riyals to banks and financing companies, with a view to granting loans to the SME sector aimed at supporting Business continuity and growth of this sector during the current stage, and that contributes to supporting economic growth and maintaining the levels of employment in these facilities, and falls within the deferred payment.
Al-Hamza added that the Foundation and within the (financing guarantees support program), deposited an amount of (6) billion riyals to enable the financing agencies (banks and financing companies) to exempt small and medium enterprises from the costs of the guarantees program for financing small and medium enterprises loans (guarantees) with the aim of contributing to reducing The cost of lending to facilities benefiting from these guarantees during the fiscal year 2020 and supporting the expansion of financing.
In this regard, he said that the Foundation has allocated 800 million riyals to support payment fees for all stores and private sector facilities for a period of (3) months, whereby the institution bears through fees for the benefit of the payment services providers participating in the national system.
He pointed out that there is a great response from banks and financing companies, and the benefit is clear. We have about 50 thousand contracts, payment payments were postponed, 400 financing contracts granted within the secured financing program and 600 guarantees issued, all during the past month and a half, which are numbers that confirm the extent of taking advantage of the programs offered by the Foundation.
He said that the institution stimulated banks and finance companies to review credit policies in line with the current conditions, and we provide guidance for cooperation with clients, and we have found a great response from banks as they redesigned some procedures, and made it possible to provide a website for remote communication with clients.
He said that the institution does not intend to obligate banks with anything, but every applicant of any bank or financing company must know the reason for not granting the loan and can benefit from the programs of the General Authority for Small and Medium Enterprises, as it has programs to achieve communication with the financing agencies directly, in addition to that the financing options available and not limited to a single bank or company, in addition to that the customer can convince the bank of his idea by providing evidence of the feasibility and profitability of his project.
With regard to individual clients, he said that the institution issued several circulars to banks and financing companies that loan payments are postponed to individuals who lost their work during the pandemic period, and in the case of their income level falls, banks are obligated to reschedule the debt ratio within certain limits, and in the event that the individual customer defaults Before a pandemic, certain formulas can be reached with the bank or finance company.
