Saudis small businesses get boost from new SAMA licensing rules

RIYADH: New licensing rules in the Kingdom should give a much needed boost to small businesses, says finance chiefs.

The Saudi Arabian Monetary Agency (SAMA) this week published new rules which aim to regulate the licensing process for such companies and how they conduct their business.

The regulator said the regulations would ensure compliance with information security, corporate governance, internal organization, risk management and internal audit.

SAMA said the rules will also introduce two new financing activities: Digital finance intermediation and collection of financing agencies’ debts.
These two activities will be supervised and monitored to bolster the stability of the financing sector and protect consumers rights.

The minimum paid capital for any company that wishes to practice digital finance intermediation is set at SR2 million while for collection companies it is SR10 million.

“The Kingdom boasts a robust financing system that can keep up with the market’s needs,” said Waleed Ghaith, a member of the Saudi Economic Association. “The Kingdom is eager to develop and improve the performance of its financing systems in order to create a conducive environment for enterprises that allows them to work with great efficiency.”

Financial adviser Abdullah Baeshen added that the new rules would encourage investors to invest in the financing sector which would in turn boost the capital available to SMEs.