The Saudi Arabian Monetary Authority (SAMA) announced Sunday that its private sector financing support program has exceeded its SAR50 billion ($13 billion) limit.
It said the total amount used from this allocation has reached about SAR51.7 billion ($13.7 billion) by late June.
The number of contracts for micro, small, and medium enterprises (MSME) that have benefited from the Deferred Payments Program for the financial sector (banks and financing companies) since its launch in mid-March has amounted to more than 71,000, SAMA stated.
The contracts covered 26,000 micro-enterprises, 18,000 small enterprises, and 27,000 medium enterprises.
SAMA has originally allocated SAR 30 billion for deferred payments. However, the allocated amount was raised in line with increasing demand from beneficiaries.
What was spent has exceeded the announced target, the Authority stressed, adding that it included four main initiatives: the deferred payments program, the secured financing program, the loan guarantee program, and the support program for point of sale (POS) and e-commerce fees.
All these initiatives are aimed at mitigating the effects of the precautionary measures taken in the MSME sector to face the pandemic.
SAMA said that financing guarantee contracts reached 1,197 at a total value of nearly SAR1.1 billion.
A total of 130,000 points of sale and 3,600 e-stores benefited from the program for the period from mid-March until June 30.
A total of 248 million POS transactions and 25 million e-transactions were exempt from fees. POS and e-commerce transactions were exempt from fees worth SAR36 billion and over SAR5 billion, respectively. SAMA supported fees payment of SAR327 million.
Saudi Arabia’s central bank pumped SAR50 billion ($13.3 billion) into the Kingdom’s banking system in March to help manage the fallout of the coronavirus pandemic and drop in oil prices.
SAMA aimed through this initiative to support financial stability and boost credit facilities to the private sector. It also targeted helping banks amend and restructure loans without additional fees and support private sector employment.
The support programs include three basic elements aimed at alleviating the burden of fluctuating cash flows, supporting working capital and enabling it to grow during the coming period, and contributing to supporting economic growth and maintaining employment in the private sector.