SAUDI EXTENDS FINANCIAL LIFELINE TO PRIVATE SECTOR

While the health and well-being of Saudi citizens and residents is a key government priority, authorities are also supportive of the country’s private sector.

Companies have registered more than 51,000 employees in the Human Resources Development Fund, or Hadaf’s, Employment Support initiative, which was “launched by the government to support wages of Saudis working in the private sector up to 50% of the employee's monthly salary for two years”. The initiative supports all jobs, professions and economic sectors.

Companies can also receive additional support of 10% if employees are females, disabled or are employed in less populous cities and in small, micro and medium enterprises, provided that the maximum support does not exceed 50% of the monthly salary for the employee or SAR 3,000, whichever is less.

Separately, the General Organization for Social Insurance (GOSI) sent close to SAR 1.2 billion (USD 319 million) to more than 400,000 Saudi nationals working in private sector companies, which were affected by the pandemic.

“The financial assistance was provided to the beneficiaries who submitted applications during the specified period announced earlier,” said Sulaiman Al-Gwaiz, the GOSI governor.

Meanwhile, the Saudi Arabian Monetary Authority (SAMA) has also directed domestic banks to postpone three months instalments of all financing products for Saudi workers registered in the unemployment insurance (SANED) from April, without any additional costs or fees.

Saudi insurance companies have also extended existing vehicle insurance policies for a period of two months but also adding two months to vehicle insurance policies purchased during the period from 8 May to 6 June without incurring any additional costs. The benefits will be processed electronically and without the need for the customer to communicate with the insurance company.

The Ministry of Industry and Natural Resources has also rolled out 27 measures to support businesses in the industrial and mining sector.

The measures include postponing or restructuring loans, deferring or reducing various ministry fees and automatically extending industrial licenses, renewing customs exemption and labour documents. A 30% discount on utility bills and payment of 50% is also being offered to eligible companies.

“Additionally, other initiatives were focused on supporting mining investors in: deferring the implementation of mining licenses work programmes, extending the period for completion of requirements for issuing and renewing licenses, extending the financial claim period for holders of small mines licenses, raw materials mines’ licenses, mining licenses for payment of financial dues, extending the period of export permits, extending the validity period of all valid mining licenses,” according to the Saudi Press Agency.

Despite the short-term headwinds, the kingdom’s mining sector continues to attract interest. In April, the ministry issued seven decisions related to the largest allocation process for mining reserve sites in the kingdom, comprising 54 sites with an area of approximately 4,000 square kilometres.

Located in the regions of Riyadh, Makkah, Madinah, Asir, Hail and Najran, 12 of the sites have gold deposits, another 12 have copper, nine boast rare earth elements and seven offer silver ore.

Interest in the kingdom’s mining sector is expected to rise as the Saudi Geological Survey plans to start detailed exploration of the mining reservoirs, which will fuel private sector interest.

The kingdom’s Social Development Bank also rolled out a slew of initiatives to nurture and support micro-enterprises and self-employed entrepreneurs in their time of need. The bank said it has earmarked more than SAR 9 billion to support small companies in the private sector affected by the coronavirus crisis.

“The bank dedicated SAR 8 billion for the promising and of priority enterprises, among those micro and small-size establishments, to be funnelled through main tracks, including: fast and affordable financing for 6,000 small businesses and start-ups, newly incepted or previously existent, alike, with focusing on activities with technical feasibility,” according to SDB.

The development bank has also launched a healthcare portfolio to help 1,000 medical units raise their operational capacity, at a time when the requirement for protective gear, masks and other essential medical supplies is soaring.

In May, the Prince Mohammed bin Salman bin Abdulaziz Foundation (Misk) said 16 companies had passed its Misk 500 Startup Accelerator Program, showing support for start-ups at a crucial time of their development.

The third batch of companies to have graduated from the programme, include Saudi, UAE and Jordanian companies, focused on physical fitness, employment, e-commerce, and healthcare technologies.