Saudi ‘Responsible Retail Financing’ program effective from today

The Saudi Arabian Monetary Authority (SAMA), the Kingdom's central bank, has launched on Sunday the “Responsible Retail Financing” program.

Under the new system, government subsidies, such as the Citizen’s Account or social security as well as the subsidies offered by the Saudi Ministry of Housing or the Real Estate Development Fund (REDF), are not taken into account, when calculating clients’ monthly income.

Monthly credit liabilities will not also exceed 55 percent of clients’ monthly salaries and will not also cross 65 percent for beneficiaries from the Ministry of Housing or REDF.

The new scheme guidelines are aimed at encouraging responsible financing, to meet customer needs, mainly the purchase of homes and properties rather than their consumption needs.

The program is also aiming to enhance financial inclusion through providing appropriate homes for all society categories.

The responsible financing plan also ensures fair competition among all banks and financing institutions, which are authorized by SAMA.