MICROCAPITAL BRIEF: International Finance Corporation to Advise Saudi Hollandi Bank on Small and Medium-Sized Enterprises (SMEs) Market in Saudi Arabia

Saudi Hollandi Bank (SHB), a Saudi Arabia-based, publicly-owned commercial bank, recently signed a cooperation agreement with the International Finance Corporation (IFC), the private-investment arm of the World Bank Group, to receive advisory services on expanding the provision of credit to small and medium-sized enterprises (SMEs) in Saudi Arabia.

Commenting on the agreement, Mr Abdullah Khafrah, SHB’s chairman, stated “Small and medium enterprises make up over ninety percent of businesses in Saudi Arabia and employ over eighty percent of the workforce. Yet the contribution of small to medium enterprises to the country’s total gross domestic product (GDP) is low compared to [that of] other countries, at only thirty-three percent total share of private sector gross product.” In its 2009 annual report, SHB disclosed total assets of SAR 59.1 billion (USD 15.8 billion), a gross loan portfolio of SAR 36 billion (USD 9.6 billion), return on assets of 0.14 percent and return on equity of 1.51 percent.

By Jacqueline Foelster, Research Associate

About Saudi Hollandi Bank: Established in 1926 as the “Netherlands Trading Society,” Saudi Hollandi Bank is a publicly-owned bank that operates three principal business segments, namely a corporate banking group, a personal banking group and a treasury, which provides asset management services. It also offers products and services that are Shariah-compliant, meaning that they are consistent with Islamic teaching, and it operates “Ladies Banking Branches”, which aim to cater to the financial needs of women. SHB disclosed in its 2009 annual report total assets of SAR 59.1 billion (USD 15.8 billion), a gross loan portfolio of SAR 36 billion (USD 9.6 billion), return on assets of 0.14 percent and return on equity of 1.51 percent.

About International Finance Corporation (IFC): A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reports net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent and total investment mobilization of USD 18.4 billion to 528 projects.

Source and Additional Resources:

[1] Saudi Hollandi Bank Press Release, “Saudi Hollandi Bank partners with the International Finance Corporation to support small to medium businesses in Saudi Arabia,” http://www.shb.com.sa/vEnglish/pressdetail.asp?catID=&articleID={561EB43A-FC0E-4C94-B79D-2887CA8F89FD}

MicroCapital.org Brief, April 18, 2011, “International Finance Corporation (IFC), Arab Monetary Fund (AMF) Launch “Arab Secured Transactions Initiative” to Boost Lending to Small and Medium-Sized Enterprises (SMEs),” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-arab-monetary-fund-amf-launch-arab-secured-transactions-initiative-to-boost-lending-to-small-and-medium-sized-enterprises-smes/

MicroCapital Universe Profile: Saudi Hollandi Bank (SHB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Saudi+Hollandi+Bank

MicroCapital Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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