(Bloomberg) --
Saudi Arabia's Ministry of Finance and three of the kingdom's largest banks have started a supply chain financing facility that will enable contractors to secure money owed to them faster.
The Finance Ministry has partnered with Saudi British Bank, Samba Financial Group and National Commercial Bank, according to a statement. The loans will be available to suppliers to the government that have had invoices approved, but are still awaiting payment.
The move is the latest sign of the government trying to better support suppliers, many of which complained about difficulties getting invoices approved by the government following the oil price slump in 2015. The government pledged 50 billion riyals ($13 billion) to expedite payments for government contractors in April as part of stimulus measures to support the private sector, which was battered by the fallout from coronavirus pandemic.
“We all benefit from this -- the banks get some business, the suppliers get money earlier -- and the government benefits from the effects of having the money back out circulating again,” David Dew, managing director of SABB, said in an interview.
SABB has set up a 2 billion-riyals revolving credit facility as part of the agreement with the government, he said. The government may look to add all the Saudi banks to the supplier financing program, he said.
©2020 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
