SAMA unveils SAR 50 bln coronavirus financing scheme to support private sector

The Saudi Arabian Monetary Authority (SAMA) launched an SAR 50 billion financing package to support the private sector, especially the small and medium enterprises (SMEs), and mitigate the potential economic impacts of the coronavirus outbreak.

The new scheme aims to enable the private sector to boost the Kingdom’s economic growth through the following measures:

First: Financing support for SMEs

The program focuses on alleviating the impact of precautionary measures adopted to combat the coronavirus on SMEs, mainly volatility in cash flows. It also aims to support working capital, contribute to local economic growth and maintain employment rates in the private sector.

Under the new scheme, up to SAR 30 billion funding will be used by all banks and finance institutions to defer payments owed by SMEs for six months with immediate effect.

SMEs will be granted concessional loans of up to SAR 13.2 billion from banks and finance institutions to maintain their operations, contribute to economic growth and maintain employment rates at these facilities.

Banks and finance institutions will use a funding of up to SAR 6 billion to exempt SMEs from the costs of a loan guarantee program. The funding aims to reduce lending costs for beneficiaries throughout 2020.

Second: Coverage of points of sale (POS), e-commerce fees

SAMA will cover payment fees for all private sector stores and facilities for a period of three months by providing a funding of over SAR 800 million. SAMA will pay those fees for service providers registered in the national system.

Third: SAMA will coordinate with banks and finance institutions to facilitate payment of loans secured by the facilities, which are impacted by the precautionary measures adopted in Makkah and Madinah.

The performance of local banks is still solid and the sector is able to overcome challenges, SAMA concluded.