SAMA Governor, Dr. Ahmad bin Abdul Karim Al-Kholifey, will receive at the SAMA's headquarters on Thursday 1 Shaban 1438 AH corresponding to April 27, 2017 CE, in the presence of a number of senior officials and SAMA's employees. During the meeting, challenges and opportunities related to the finance companies sector were discussed, and the developments regarding the finance companies sector and exploring the future of the sector in light of the regulations and legislation aimed at the safety of the sector and the protection of its dealers. His Excellency also stressed the importance of continuing such meetings in the future to enhance the positive contribution of financing companies in the financial sector. In the opening speech, Dr. Al-Kholifey said that SAMA pays great attention to the finance companies sector, which is complementary to the banking sector and supports the achievement of economic growth. His Excellency also stressed the importance of protecting customers, giving them more care, and providing their services in a way that meets expectations. The role of the Monetary Authority is to support the work of the sectors that it supervises to grow and contribute to raising the rates of Saudization and qualifying national cadres.
On this occasion, they reviewed the most important developments in the finance companies sector; 34 companies were licensed to engage in one or more financing activities. The combined capital of licensed financing companies until the end of 2016 amounted to 12.4 billion riyals, and the finance companies sector grew in varying proportions, as the total assets of financing companies increased in 2016 by 5% to reach 39 billion riyals, and the assets of real estate finance companies accounted for 29%. Of total assets. Also, the total managed financing assets of finance companies increased in 2016 by 5% to reach 55 billion riyals, as the managed financing assets of real estate finance companies grew by 12% while the increase was only 3% in the managed financing assets of financing companies other than real estate.
Distributed funds granted by finance companies were distributed among the main sectors of individuals, small and medium enterprises (SMEs), and corporate non-SMEs. In 2016 AD, the funds granted to the individual sector accounted for the largest part of the total financing assets (within the budget) at a rate of 64%, while the percentage of the funds granted to companies reached 19% and the percentage of the funds granted to the small and medium enterprises sector reached 17% of the total financing assets (within the budget) for all funding companies. With regard to profitability indicators, it decreased, bringing the return on equity for the total sector to 5% and the return on assets 2%. The net income of financing companies for the year 2016 was about 871 million riyals. Regarding the localization of jobs in finance companies, the number of employees of finance companies reached more than 6,620 employees at the end of 2016, and the percentage of Saudis working in the sector represented 63% of the total number of employees.
Al-Kholifey explained that SAMA aims to enhance the growth and stability of the financing companies sector and create an environment that contributes to providing more services with higher quality and competitive prices that serve the citizen and meet the needs of the market. This can be achieved by working to overcome any obstacles faced by companies to reach a financial sector that supports Sustainable economic growth. SAMA will strive to do everything that would support finance companies to achieve sustainable growth and maintain the stability of this sector.
In conclusion, Al-Kholifey thanked the participants in the meeting and stressed the importance of continuing communication with SAMA to develop the finance sector and upgrade it and protect dealers in it. This was the second meeting between the SAMA and the heads of the boards of finance companies. SAMA eagers for communication with the sector committees to contribute to more cooperation between companies and SAMA to create growth potentials and to maintain the integrity, stability and fairness of the financing sector.