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SAMA issues rules for microfinance firms

SAMA issues rules for microfinance firms
Saudi Arabian Monetary Authority

Riyadh – Mubasher: The Saudi Arabian Monetary Authority (SAMA) has issued regulations governing microfinance companies, as part of its efforts to enhance financial inclusion.

Rules set the minimum paid-up capital for a microfinancing company at SAR 20 million, with SAMA capability to raise or lower the minimum capital according to market conditions, and stipulate that the total amount of finance granted to the beneficiary of the microfinance consumer company may not exceed SAR 50,000.

The aim is to regulate the licensing provisions of microfinance companies and organize their activities, according to a statement by SAMA on Tuesday.

SAMA invited corporate and business people interested in microfinance to learn about financing regulations and rules, microfinance companies’ regulation and licensing forms and guidelines.

SAMA clarified that it seeks through these rules to attract a new segment of investors and companies with medium capital to work under its supervision in a manner that ensures efficiency.

This way, more companies will be adhering to the requirements issued by SAMA regarding security information, corporate governance, internal regulation, attribution, risk management, compliance and internal audit

The authority also wants to provide more products that meet the needs of consumers, within a supervisory framework that ensures consumer protection, through standards and requirements for the protection of consumer rights.