Saudi Arabia unveils $13.3bln economic stimulus package to offset coronavirus impacts

RIYADH — The Saudi Arabian Monetary Authority (SAMA) unveiled an SR50 billion economic stimulus package to support the private sector, especially the small and medium enterprises (SMEs), to reduce the potential economic impacts of the coronavirus outbreak.

In a statement issued on Saturday, SAMA said that the financial package aims to enable the private sector and boost the Kingdom’s economic growth through the following measures:

Financing support for SMEs

The program focuses on alleviating the impact of precautionary measures adopted to combat the coronavirus on SMEs, mainly volatility in cash flows. It also aims to support working capital, boost local economic growth and maintain employment rates in the private sector.

As part of the stimulus package, up to SR30 billion is earmarked for banks and finance institutions for deferred payments by SMEs for six months with immediate effect.

SMEs will be granted concessional loans of up to SR13.2 billion from banks and finance institutions to maintain their operations, contribute to economic growth and maintain employment rates at these facilities.

Banks and finance institutions will use a fund of up to SR6 billion to exempt SMEs from the costs of a loan guarantee program. The funding 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 stores and facilities for a period of three months by providing a fund of over SR800 million. SAMA will pay those fees for service providers registered in the national system.

SAMA will also coordinate with banks and finance institutions to facilitate payment of loans secured by the facilities, which are impacted by the precautionary measures adopted in Makkah and Madinah.

The performance of local banks is still solid and the sector is able to overcome challenges, the statement concluded.