SAMA exempts clients from ‘Kafalah’ fees, provides 1-year support for lending financing

The Saudi Arabian Monetary Authority (SAMA) announced depositing SAR 6 billion in favor of financing entities to exempt the micro, small and medium enterprises (MSMEs) from the costs of the Financing Guarantee (Kafalah) program.

The period of exemption will start from March 14 to Dec. 31, 2020, the authority said in its official Twitter account, adding that the beneficiaries will be exempted from issuance, renewal, extension and rescheduling fees under Kafalah.

The Saudi central bank urged the funding entities to submit an official exemption notice for the facilities benefiting from the program, including the program’s fees.

SAMA also announced providing soft financing for MSMEs of up to SAR 13.3 billion that will last for a year starting from March 14, 2020.

The financing can be extended for an additional year and is intended to support business continuity and growth of the sector during the current stage.

The authority also pointed out that it will provide credit facilities at subsidized prices for financing entities to enable them to grant subsidized loans to the beneficiaries.