Finance Companies’ Credit Hits Record SAR20.858 Billion in Q3 2024

Finance companies in Saudi Arabia extended a record SAR20.858 billion in credit to non-individuals by the end of the third quarter of 2024, according to data released by the Saudi Central Bank (SAMA). This marks an annual growth rate of 8.4%, an increase of SAR1.612 billion compared to SAR19.246 billion in the same period of 2023, highlighting the expanding role of non-bank financing in the Kingdom’s economy.

Context and Background

The record credit figure, published in SAMA’s monthly statistical bulletin for December, reflects the growing contribution of finance companies to Saudi Arabia’s economic diversification under Vision 2030. By providing targeted financing to enterprises of all sizes, these institutions support non-oil sectors including construction, services, and trade. The quarterly growth of 2%, rising by about SAR324 million from SAR20.534 billion at the end of Q2 2024, demonstrates sustained demand for alternative financing sources outside traditional banking channels.

Key Details

Credit distribution across enterprise sizes shows small enterprises received the largest share at 38% (SAR7.883 billion), followed by medium enterprises at 33% (SAR6.929 billion). Large companies accounted for 16% (SAR3.403 billion), while micro-enterprises received 13% (SAR2.643 billion). By economic activity, the construction sector led with SAR6.450 billion (31% of total), followed by services at SAR4.548 billion (22%), and trade at SAR3.110 billion (15%). Other activities, including transportation, communications, utilities, mining, agriculture, and government services, comprised the remaining balance.

Implications and Impact

The record credit levels signal robust private sector activity and confidence in Saudi Arabia’s non-oil economy. The concentration in construction and services aligns with Vision 2030’s infrastructure and tourism goals, while the significant share to small and medium enterprises (SMEs) supports the Kingdom’s objective to boost SME contribution to GDP from 20% to 35% by 2030. The relatively low credit to agriculture and mining suggests room for future growth in these sectors as the economy diversifies further.

Vision 2030 Alignment

This milestone directly supports Vision 2030’s goals of developing a diversified, sustainable economy by enabling private sector growth through non-bank financial institutions. The expanding credit base for SMEs and key sectors like construction and services is critical for job creation and economic resilience, reinforcing Saudi Arabia’s position as a dynamic regional economic hub.

20 Questions

Q1. What was the total credit provided by finance companies to non-individuals in Q3 2024?

A1. The total credit reached approximately SAR20.858 billion by the end of Q3 2024, according to data from the Saudi Central Bank (SAMA).

Q2. How much did the credit grow annually in Q3 2024?

A2. The annual growth rate was 8.4%, with an increase of SAR1.612 billion compared to SAR19.246 billion in Q3 2023.

Q3. What was the quarterly growth rate for credit in Q3 2024?

A3. On a quarterly basis, credit grew by 2%, rising by about SAR324 million from SAR20.534 billion at the end of Q2 2024.

Q4. Which source published the data on finance companies’ credit?

A4. The data was published in the monthly statistical bulletin for December released by the Saudi Central Bank (SAMA).

Q5. How many economic activities were covered in the credit distribution?

A5. The credit distribution spanned 11 diverse economic activities, as reported by SAMA.

Q6. What percentage of total credit went to small enterprises?

A6. Small enterprises received about 38% of the total credit, amounting to SAR7.883 billion.

Q7. How much credit did medium enterprises receive?

A7. Medium enterprises received 33% of the total, valued at SAR6.929 billion.

Q8. What share of credit did large companies obtain?

A8. Large companies represented 16% of the total credit, equating to SAR3.403 billion.

Q9. How much credit was allocated to micro-enterprises?

A9. Micro-enterprises received 13% of the total credit, totaling SAR2.643 billion.

Q10. Which economic activity received the largest share of financing?

A10. The construction sector claimed the largest share, receiving SAR6.450 billion or about 31% of the total.

Q11. How much credit did the services sector receive?

A11. The services sector followed with SAR4.548 billion, representing 22% of the total credit.

Q12. What was the credit amount for the trade sector?

A12. The trade sector received SAR3.110 billion, accounting for around 15% of the total.

Q13. How much credit went to the industrial sector?

A13. The industrial sector received SAR1.978 billion, representing about 9.5% of the total.

Q14. What was the credit allocation for transportation and communications?

A14. Transportation and communications accounted for SAR1.616 billion, or 8% of the total credit.

Q15. How much credit was provided to the water, electricity, gas, and health services sectors?

A15. These sectors received SAR634 million, representing about 3% of the total credit.

Q16. What amount of credit was allocated to mining and quarrying?

A16. Mining and quarrying attracted SAR150 million, accounting for roughly 1% of the total.

Q17. Which sectors received the lowest credit allocations?

A17. The lowest allocations were in agriculture and fishing (SAR124 million), government and semi-government activities (SAR117 million), and financing (SAR80 million).

Q18. How does this credit growth support Vision 2030?

A18. It supports diversification by financing non-oil sectors like construction and services, and boosts SME contribution to GDP as targeted by Vision 2030.

Q19. Why is the growth in credit to small and medium enterprises significant?

A19. SMEs are crucial for job creation and economic diversification. Their significant share of credit aligns with Vision 2030’s goal to increase SME GDP contribution from 20% to 35%.

Q20. What does the record credit level indicate about the Saudi economy?

A20. It signals robust private sector activity and confidence in non-oil economic growth, reflecting successful reforms under Vision 2030.

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