RIYADH — 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:1 attracting a new segment of investors and companies with medium capital to work under its supervision in a manner that ensu111res 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 SR50,000.
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 — SPA
