The Saudi Central Bank (SAMA) has extended the deferred payment scheme to facilitate private sector funding for another three months until June 30, as part of steps to mitigate the economic effects of the coronavirus pandemic.
SAMA said in a statement that the decision intends “to empower the financial sector to play its role in supporting the micro, small and medium-sized enterprises (MSMEs) sector, and contribute to supporting economic growth and preserving employment in the private sector.”
According to the Central Bank, a guaranteed financing program had been extended for an additional year until March 14, 2022, to support small and medium enterprises.
SAMA further stated that the extensions are also aimed at enhancing the central bank’s support for MSMEs, allowing them to resolve the difficulties that came with the COVID-19 pandemic and the precautionary steps taken to combat it.
The decision is in line with the central bank’s role in “maintaining monetary stability, supporting the stability of the financial sector, enhancing confidence, supporting economic growth, and mitigating the financial and economic effects of the coronavirus pandemic on various economic activities.”
Since March 14, 2020, about 99,000 contracts have benefited from the deferred payment scheme, totaling $33.04 billion (SR124 billion), according to SAMA. It has also noted that over 5,000 contracts benefited from the guaranteed financing program, valuing over $2.1 billion (SR8 billion).
Recently, SAMA has revealed that despite the economic effects of the pandemic, Saudi Arabia saw an increase in financing given to small and medium-sized enterprises (SMEs) by the Kingdom’s banks and financial companies last year.