The Saudi Arabian Monetary Agency (SAMA) issued several decisions aimed at preserving the stability of the economy and markets and mitigating the impact of the new Coronavirus (COVID 19), which contributes to enhancing the economy's durability proves its financial resilience and solvency, and protects the components of the national economy from major companies to medium and small companies and up to the emerging projects in the business sectors, which, if affected by those consequences, many of them will be exited from the markets and the consequences would have an impact on society and its components.
The supporting decisions came in line with the needs of individuals dealing with the financial system, which contributes to maintaining the integrity of their dealings, and protecting them from the effects of this crisis.
The Monetary Agency has presented a package of initiatives worth (50 billion riyals) in addition to issuing many fundamental decisions to support companies and institutions of the private sector and support the financing of small and medium enterprises, as the program consists of three basic elements, aiming to reduce the burden of fluctuations in cash flows and support the capital involved in this sector, to enable it to grow during the coming period, and to maintain continuity of employment are as follows:
1. Deferred Payments Program Depositing an amount of (30) billion riyals for the benefit of banks and financing companies, in exchange for postponing them to collect their dues with small and medium enterprises for a period of six months from its date.
2. Funding for Lending Program, depositing an amount of (13.2) billion riyals for soft financing for small and medium enterprises, by granting loans from banks and financing companies.
3. Loan Guarantee Program: SAMA incurred “guarantee” fees issued by the Kafala program for an amount of (6) billion riyals for the benefit of banks and finance companies to exempt small and medium-sized institutions from the costs of loan financing guarantees (Kafala) in order to contribute to reducing the cost of lending to these facilities, and supporting the expansion of financing.
Source (Al-Sharq Al-Awsat Newspaper, Edited)
