The Saudi Arabia Monetary Authority has set up a 50 billion riyals ($13.33 billion) Private Sector Financing Support Program as part of the government’s efforts to help companies mitigate the financial and economic impact of COVID-19.
SAMA, the central bank, said in a statement on Saturday (Mar 14) the program would especially target the SME sector.
“The purpose of the program is to mitigate the impacts of precautionary coronavirus measures on the SME sector, specifically by reducing the burden of cash flow fluctuations, supporting working capital, enabling the sector to grow during the coming period and contributing to supporting economic growth, and maintaining employment,” said SAMA.
The bulk of the support, 30 billion riyals, will go to banks and financing companies to delay debt repayments of the financial sector from SMEs for a period of six months as of its date, said SAMA.
13.2 billion riyals will be allocated as loans from banks and finance companies to the SME sector to support business continuity and contribute to maintaining employment levels in companies.
6 billion riyals will go to financial institutions to enable insurance companies to relieve SMEs of the finance costs of the kafala, or employment sponsorship, program.
800 million riyals will be set aside to support fees for point-of-sales and e-commerce for a period of three months. SAMA will pay the fees to payment service providers participating in the national system.
SAMA will also facilitate finance repayments of companies in Makkah and Madinah. The two holy cities have been hit by the ban on umrah since February 27, implemented to avoid large gatherings of people to curb the spread of COVID-19.
Saudi Arabia has been proactive in implementing preventive and precautionary measures to mitigate the spread of COVID-19 that have invariably impacted the country’s businesses. Most recently authorities locked down non-essential commercial markets and malls, and limited eateries to takeaways.
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