Saudi Arabia's Council of Economic and Development Affairs (CEDA) approved a development program for its financial sector to achieve the goals of Vision 2030 initiative, state news agency, Saudi Press Agency, reported on Wednesday.
“The program supports the national economy by developing the financial sector and enhancing its effectiveness. The objective is to increase the financial sector’s size relative to the GDP by 280 percent," said Saudi finance minister Mohammed Al-Jadaan.
"The program will create a deep, diversified, digitized and stable financial sector capable of attracting financial technology companies and focusing on financial literacy to bring the savings rates in line with leading international rates,” he added.
Dr. Ahmed Abdulkarim AlKholifey, governor of Saudi Arabian Monetary Authority (SAMA) said their initiatives fall mainly under the first pillar of "enabling financial institutions to support the development of the financial sector."
"It aims to enhance the depth and breadth of financing services, augmenting the development of infrastructure, and developing a thriving insurance sector to manage financial risks, as well as improving the capabilities and skills of our people.”
Under the initiative, SAMA plans to increase small and medium-sized enterprises (SMEs) bank financing to 5 percent from 2 percent, mortgage financing to 16 percent, insurance market and gross written premiums coverage to 2.9 percent and mandatory insurance rate for motor and health insurance to 75 percent and 45 percent, respectively, by 2020.
Meanwhile, the National Savings Strategy aims to increase the savings of Saudi households from 6 percent to 10 percent by 2030 by stimulating the demand and supply sides.
"The chief initiatives within this area include fostering the savings culture and creating an independent national savings entity that will provide government-backed retail savings products - such as savings Sukuk," AlKholifey disclosed.
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