Saudi Arabia’s supply chain finance program will significantly deepen and strengthen the local financial sector, as it will enable financial institutions to create innovative solutions for the private sector, Khalid Al-Sharif, Head of Government Finance at the National Debt Management Center (NDMC), told Argaam in an exclusive.
The innovative program, which supplements the Etimad platform, serves as a key driver for financial institutions to provide new solutions that contribute to money management and explain the cash cycle for the private sector beneficiaries.
The product will offer two solutions. It will allow better money management for the Ministry of Finance and help the private sector manage cash for beneficiaries, suppliers, contractors or any other service provider in a better, more efficient manner, Al-Sharif said.
All contractors, suppliers and service providers in all government authorities, whose dues are paid by the finance ministry, can use this product.
The product is optional for the private sector, which can either benefit from it through raising bank finance secured by the government financial solvency, or receive its dues in the normal cash cycle, within 60 days.
Moreover, the program is fully automated, Al-Sharif pointed out, adding that the agreements signed with Samba Financial Group, National Commercial Bank (NCB), and Saudi British Bank (SABB) are the basis for the required infrastructure and also link the financial institutions to Etimad so as to develop innovative financing solutions.
The clear invoicing cycle of the government dues will enhance cost and credit risk reduction, which will contribute to cutting borrowing costs, Al-Sharif concluded.
Comments
{{DisplayName}}
{{ElapsedTime}}