Saudi Shoura member slams bank after sharp fall in SME loans

RIYADH — A prominent member of Saudi Arabia's consultative Shoura Council has strongly criticized the country's Social Development Bank (SDB) following a significant fall in the amount of loans it offered to small and medium enterprises.

Abdul Rahman Al-Rashid, chairman of the economic and energy committee of the council, said: "There is a sharp drop in the amount of the social or development loans extended to the small and medium enterprises (SMEs)," he said.

"This is against the principles of the Kingdom's Vision 2030, which calls for increased participation of SMEs in building the national economy," he added.

Al-Rashid said the bank was only giving out 40 percent of its resources in loans while it was investing the remaining funds in the local stock market, which is extremely risky, at a time the local market is in need of every riyal in investment.

He asked the bank to make the conditions for loans easy and logical and to refrain from complicating procedures.

Al-Rashid questioned the bank's rationale behind keeping away its huge resources in the stock market, instead of giving away loans to boost the development process and create jobs.

"This is totally against the policies of the government," he said.

Al-Rashid said the establishment of an authority for the SMEs was not enough to support the sector.

"The authority should have numerous financing arms to support the SMEs and enable them to contribute positively to the national economy," he said.

Al-Rashid has noted that the SMEs do not usually go for loans from commercial banks because of the high risks involved while insisting that the government should establish special lending funds for them.

The SMEs are not the responsibility of the Ministry of Labor and Social Development alone but are also the responsibility of all the ministries, he said.