The Saudi Arabian Monetary Authority (SAMA) unveiled an SR50billion economic stimulus package to support the private sector, especially thesmall and medium enterprises (SMEs), to reduce the potential economicimpacts of the coronavirus outbreak.
In a statement issued on Saturday, SAMA said that thefinancial package aims to enable the private sector and boost the Kingdom'seconomic growth through the following measures:
Financing support for SMEs
The program focuses on alleviating the impact ofprecautionary measures adopted to combat the coronavirus on SMEs, mainlyvolatility in cash flows. It also aims to support working capital, boost localeconomic growth and maintain employment rates in the private sector.
As part of the stimulus package, up to SR30 billion isearmarked for banks and finance institutions for deferred loan payments by SMEsfor six months with immediate effect.
SMEs will be granted concessional loans of up to SR13.2billion from banks and finance institutions to maintain their operations,contribute to economic growth and maintain employment rates at thesefacilities.
Banks and finance institutions will use a fund of upto SR6 billion to exempt SMEs from the costs of a loan guarantee program. Thefunding aims to reduce lending costs for beneficiaries throughout 2020.
Coverage of points of sale (POS), e-commerce fees
SAMA will cover payment fees for all private sector storesand facilities for a period of three months by providing a fund of over SR800million. SAMA will pay those fees for service providers registered inthe national system.
SAMA will also coordinate with banks and financeinstitutions to facilitate payment of loans secured by the facilities, whichare impacted by the precautionary measures adopted in Makkah and Madinah.
The performance of local banks is still solid and the sectoris able to overcome challenges, the statement concluded.
