Saudi Central Bank Extends Deferred Payment Program for Private Sector MSMEs

The Saudi central bank.
The Saudi central bank.
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Saudi Central Bank Extends Deferred Payment Program for Private Sector MSMEs

The Saudi central bank.
The Saudi central bank.

With the Saudi economy set on a dynamic track to return to pre-pandemic levels, the Saudi central bank (SAMA) said on Tuesday it is extending a deferred payment program to help small businesses impacted by the coronavirus crisis by another period of three months, starting July 1.

The program - meant to support micro, small, and medium enterprises (MSMEs) affected by precautionary measures during the COVID-19 pandemic - was launched in March 2020.

Moreover, SAMA reaffirmed its keenness to maintain stability in the Kingdom’s financial sector.

SAMA clarified that during this extension MSMEs will be subject to assessment by the financing entities on the extent to which they are still affected by the COVID-19 precautionary measures, in order to be qualified for the extension.

It is worth noting that, since its launch on March 14, 2020 to date, the Deferred Payment Program has benefited more than 106,000 contracts with a total value of deferred payments worth SAR 167 billion.

The number of contracts benefiting from the Guaranteed Financing Program has exceeded 5,282 with a total financing value of more than SAR 10 billion.

The purpose of those programs is to support the liquidity level in the financial sector (banks and finance companies) and to enable the financial sector to ease the economic impact of the COVID-19 precautionary measures on the private sector, especially the MSMEs.

Last March, SAMA announced an extension of the program for three months, ending at Q2 2021. The same reasons for this month’s extension applied then.



Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)
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Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)

The Saudi real estate market is currently in a state of cautious anticipation, driven by unprecedented decisions and measures announced by Crown Prince Mohammed bin Salman.

These steps aim to increase the supply of properties and restore balance in the market to address the rising costs of land and rental prices.

Data from the market shows a stagnation in property purchases by citizens, as they await the impact of these measures, hoping they will bring stability to property prices in Riyadh and lower costs.

In March, the Crown Prince directed the implementation of a series of regulatory measures, including lifting restrictions on the development of over 81 square kilometers of land north of Riyadh.

This move is expected to deliver tens of thousands of affordable residential plots annually to citizens, following a significant rise in property prices in Riyadh.

According to Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail, these measures will add between 10,000 and 40,000 plots of land annually in the northern region of Riyadh, ensuring a better balance between supply and demand in the market.

The Crown Prince has already donated 1 billion riyals to the National Developmental Housing Foundation (Sakan), represented by Jood Eskan, to support home ownership for eligible families across Saudi Arabia.

The housing projects funded by this donation are to be completed within 12 months and executed by national companies.

The Crown Prince also ordered monthly progress reports to ensure that all residential units are delivered within one year.

Real estate market experts told Asharq Al-Awsat that current market data reveals a stagnation in property purchases by citizens, as they await the impact of recent policy changes and their potential to restore balance to the market.

Many real estate companies and agencies have observed a decline in sales activity, with property marketers facing difficulties in encouraging buyers who prefer to delay decisions until the effects of Crown Prince Mohammed bin Salman’s directives take shape.

Real estate expert and marketer Abdullah Al-Mousa told Asharq Al-Awsat that the current stagnation in property prices in Riyadh is a direct result of the Crown Prince’s initiatives to increase property supply, which aim to restore price equilibrium following the recent surge in real estate costs.

He views the decline as a positive step toward balancing supply and demand, contributing to a more sustainable and fair market for all stakeholders.

Al-Mousa anticipates that this stagnation will persist until all government directives are fully implemented in the coming months.

He noted that, with plans to increase the property supply, the market could experience gradual recovery in the long term, especially given Riyadh’s continued population and economic growth.

The expert highlighted that several factors may sustain the current stagnation, including high interest rates, which reduce citizens’ purchasing power, the oversupply of properties relative to demand, and global economic fluctuations that could affect investments.

However, he emphasized that Riyadh’s ongoing population growth, improving national economy, rising per capita income, large-scale infrastructure projects like the Riyadh Metro, and continued government support for housing programs are expected to drive the recovery of the real estate market.

Al-Mousa also predicted further improvement in the sector as policies are implemented and market conditions are monitored.