The Saudi Arabian Monetary Authority (SAMA) announced the issuance
of the rules governing microfinance companies, which aim to regulate the
licensing provisions of this type of companies and to organize their activities
according to the powers granted to SAMA under the regulation of the financial
companies control and its executive regulations.
The issuance
of these rules is part of SAMA's efforts to enhance financial inclusion by providing
more financing products to meet consumer’s needs; in line with the SAMA’s role
in enhancing financial stability and supporting the growth and economic
development witnessed by the Kingdom towards achieving the goals of the
Kingdom's Vision 2030.
SAMA
clarified that it seeks through these rules to achieve several objectives,
including; attracting a new segment of investors and companies with medium
capital to work under its supervision in a manner that ensures the efficiency
of these companies by adhering to the requirements issued by SAMA regarding
security Information, corporate governance, internal regulation, attribution,
risk management, compliance and internal audit, as well as providing consumer
finance products that meet the needs of consumers, within a supervisory
framework that ensures consumer protection, through standards and requirements
for the protection of consumer rights.
The specified rules for
the practice of microfinance activity set the minimum paid-up capital for the
company operating this activity at (20.000.000) twenty million riyals, with SAMA
capability to raise or lower the minimum capital according to market
conditions. The rules also stipulate that the total amount of finance granted
to the beneficiary of the microfinance consumer company may not exceed SR
50,000.
Finally, SAMA invites corporate and
business people interested in microfinance to learn about financing regulations
and rules, microfinance companies regulation and licensing forms and guidelines
by visiting SAMA's website: http://www.sama.gov.sa/ar-sa/Laws/Pages/FinanceRulesAndRegulations.aspx
