Lending to Saudi micro and small businesses to grow in 2022 - Arab News

RIYADH: Saudi Arabia’s micro, small and medium enterprises continue to grow in 2022 on the back of strong consumer demand, as is evident from the steady increase in MSME lending by the country’s banks and financial companies. 
Last month alone, investment deals worth $13.8 billion were signed at the Global Entrepreneurship Congress held in Riyadh, which also saw global firms announce expansion plans into Saudi Arabia.
Read More: Kafalah Fund signs 10 agreements, MoUs worth $1.67bn to finance SMEs
The lending boom this year follows a similar trend last year. 
Saudi Arabia is ranked second in MENA in startup funding activities, providing SR2 billion ($533 million) to entrepreneurs in 2021, Abdulaziz Al-Nashwan, general manager of equity at Monsha’at, told Arab News last month on the sidelines of the Global Entrepreneurship Congress.
Saudi banks and finance companies have been on a lending spree over the last few years, with both collectively extending loans worth SR200.3 billion ($53.4 billion) to the MSME sector in the third quarter of 2021, up from SR175.7 billion in the third quarter of 2020, the latest Saudi Central Bank, or SAMA, data revealed. This is a 14-percent increase on a year-on-year basis. 
This included SR14.2 billion credit provided by financial companies to MSMEs in the third quarter of 2021. This came as an increase from around SR10.75 billion in the third quarter of 2020, recording 31-percent growth on a year-on-year basis. This amounts to almost 22 percent of finance companies’ total credit facilities. 
Lending to Saudi micro and small businesses to grow in 2022 - Arab News
Recent surges in MSME credit indicate that the country’s business environment is improving despite COVID-infused challenges as the financial sector sees a strong capital liquidity value in lending to the Kingdom’s MSME sector.  
SAMA statistics indicated credit facilities provided by local commercial banks to MSMEs also grew to SR186.2 billion in the third quarter of 2021 from SR165 billion in the same period the previous year, recording a 12.9-percent increase. This value equates to roughly 7.9 percent of the banks’ total credit facilities. It comes on the back of credit facilities by banks to MSMEs spanning over three years from 2018 through 2020 increasing by a noticeable 69 percent.
Read More: Saudi Arabia doles out $533m on startups in 2021, says Monsha’at official
This indicates a steady expansion of monetary loans to MSMEs, providing a promising future to the sector, with loans from finance companies increasing by 53.2 percent over the same duration.
With consumer spending continuing to increase in Saudi Arabia, this is creating a pent-up demand for goods and services provided by the country’s MSME sector. This, in turn, is pushing companies to go for further lending to meet the growing demand in the market. 
This steady growth in MSME lending has been witnessed despite the Saudi Central Bank recently increasing the interest rates to tackle inflation. This event could be seen as a positive indicator of how the Kingdom’s financial sector can look for promising short-term revenues. This, in return, could aggrandize loans to MSME in the future as the economy and money market stabilize.
Saudi stocks closed slightly higher on Sunday, with gains registered by several major companies, including AMAK, and ACWA Power. 

As of the closing bell, the Saudi main index, TASI, closed 0.61 percent higher at 13,395. 
The parallel market Nomu slid 0.21 percent, to reach 24,245. 

Shares in AMAK rallied 10 percent to lead the gainers.

NADEC led the fallers since the opening, finishing the session down 3.54 percent, while shares in Nama Chemicals Co. slid 2.75 percent. 

Among the gainers, ACWA Power rose 6.80 percent, while Bank Aljazira gained 6.18 percent.

Aramco, the largest player in the Saudi oil market, closed today’s trading session 0.12 percent lower. 

In the banking sector, the Saudi National Bank climbed 0.28 percent, while the Kingdom’s largest valued bank, Al Rajhi, edged up 0.49 percent.

As for Saudi pharma operators, Nahdi Medical Co. rose 0.96 percent, while Aldawaa Medical Services Co. was up 0.52 percent at the closing bell. 
In the insurance sector, Al-Rajhi Company for Cooperative Insurance fell 0.73 percent.

In the food and beverages sector, Almarai Co. edged up 1.15 percent.

Brent crude was priced at $102.78 a barrel, and US benchmark West Texas Intermediate is at $98.26 a barrel, as of 3:30 p.m. Saudi time.
RIYADH: The Saudi Export-Import Bank approved loans worth over SR5.5 billion ($1.46 billion) during the first quarter of 2022, the Saudi Press Agency reported. 
It is part of the bank’s efforts to boost Saudi exports and help diversify the national economy.
The value of approved financing requests in the first quarter of this year amounted to SR2.5 billion, according to the bank. The figure was utilized by firms in the fields of energy, petrochemicals, technology and agriculture among others.
As for the value of insurance applications,  these amounted to SR3 billion during the same period. This was allocated to local firms, banks, and financial institutions.
In addition, since the beginning of 2022, the bank has signed five memorandums of understanding which aim to open more credit lines to empower Saudi exporters.
RIYADH: Oman’s production of crude oil and oil condensates climbed by over 8 percent in February, compared to the same period last year, amounting to around 61 million barrels. 
Total exports of crude oil in the Sultanate rose by 18.3 percent during February, compared to the same period in the previous year, the Oman News Agency reported. 
However, the production of natural gas in this month saw a decline of 4 percent to reach 7.5 million cubic metres.
RIYADH: Saudi Arabia’s Industrial Production Index, also known as IPI, grew by 22.3 percent in February compared to the same month of 2021.
This was the highest year-on-year growth rate during the last three years, the General Authority for Statistics added.
IPI’s positive growth for the tenth month in a row is attributed to higher production in the three sub-sectors; mining and quarrying, manufacturing and electricity and gas supply.
The relative weights of the mining and quarrying, manufacturing and electricity and gas supply sectors in the IPI are 74.5, 22.6 and 2.9 percent, respectively. 
In February 2022 mining and quarrying grew by 25.5 percent compared to the same month a year earlier, as Saudi Arabia increased its oil production to its highest level by over 10 million barrels per day. 
Additionally, electricity and gas supplies were down by 9.3 percent during February 2022, compared to a month earlier.
This comes as Saudi IPI’s positive trend follows a long period of negative growth rates in 2019 and 2020, driven by pandemic repercussions.
It turned positive in May 2021. 
CAIRO: Egypt said on Sunday its annual inflation rate surged past 12 percent in March, up from 10 percent in February, largely because of Russia’s war in Ukraine, which has strained global markets and sent oil prices to record highs.
Data released by the Central Agency for Mobilization and Statistics shows price hikes across many sectors, from fuel, electricity and food items to housing, medical services and entertainment.
The figures cover the period from April 1, 2021, to March 30, 2022.
The hikes have inflicted a heavy burden on consumers, especially lower-income households, and particularly for everyday necessities.
Most of Egypt’s more than 103 million population have suffered from price hikes since the government embarked on an ambitious reform program in 2016 to overhaul the country’s battered economy. Nearly 30 percent of Egyptians live in poverty, according to official figures.
The figures show that food and beverage prices hiked by 4.5 percent in March compared to February prices, with price hikes for cereal and bread hitting 11 percent. 
The government announced last month fixed prices for unsubsidized bread for the next three months in an effort to fight the increase.
The accelerating hikes came in the wake of the Central Bank’s decisions to raise its main interest rate and to devalue the local currency against the U.S. dollar to fight inflation.
Justifying its March 21 decisions, the bank citied the war in Ukraine that has shaken the global economy and threatened food supplies and livelihoods of people across the world.
Brent crude, the price basis for international oil trading, was at over $102 per barrel over the weekend after hitting a peak of nearly $140 in March.


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