The Saudi Arabian authorities have confirmed the requirements for approving financing portfolios for micro-enterprises. The regulations governing the approval of financing portfolios for microfinance projects set out several conditions for approving financing portfolios. The first of these is that the entity and its subsidiaries have a valid official license from licensed government agencies and an approved organizational structure and published bylaws and have an integrated headquarters in the geographical scope where it provides its services.
It also states that the objectives or activities of the governor will include the provision of services for the development of microfinance projects. Therefore, it has to have a documented program and an integrated work mechanism with a transparent methodology. It includes qualified administrative and technical staff appropriately qualified for the size and nature of the services it will provide to the beneficiary, and it has all the means and tools which will facilitate the provision of its services and the absence of any financial obligations on it. In other words, it has to be financially solvent.
The Kingdom’s National Competitiveness Centre has launched a consultation on the draft regulation to approve financing portfolios for microfinance projects. It ends on 1 September 2021.