RIYADH: In a push toward increasing financial literacy in Saudi Arabia, the Kingdom’s central bank has licensed Fas Finance Co. to provide consumer microfinance solutions.
The licensing decision reflects the effort of the institution — also known as SAMA — to support the sector, enhance transaction efficiency, and encourage innovative solutions for greater financial inclusion in Saudi Arabia.
Fas Finance is a Shariah-complaint digital consumer finance company under the umbrella of Fas Labs, a jointly owned venture by Arabian Centres Co. and Fawaz Abdulaziz Alhokair Co.
Fas Labs currently owns 65 percent of Fas Finance while Egypt’s buy now, pay later platform valU owns the remaining 35 percent after a deal that was signed in June 2022.
Fas Labs first received preliminary approval to establish the digital consumer company in January 2022.
SAMA’s commitment to making Saudi Arabia a regional fintech hub is evident in its intensive licensing progress.
On Tuesday, SAMA granted UAE-based BNPL company Tabby a permit to run its post-paid payment solutions in the Kingdom.
Saudi Arabia has now authorized five BNPL solution providers, further strengthening its position as a regional hub.
Moreover, SAMA granted a permit to Tamara at the beginning of this month, to provide consumer finance through the BNPL platforms, which will also attract a new segment of investors and value-added firms to achieve more efficient operations.
The central bank is also working on using technology in financial services to support Saudi Arabia’s broader goals as it pushes ahead with the Vision 2030 economic diversification strategy.
Under the Ministry of Finance’s national fintech strategy, the number of firms in the sector is expected to increase from 82 in 2022 to 230 by 2025.
The plan also seeks to increase the fintech sector’s contribution to the gross domestic product to SR4.5 billion ($1.2 billion) and create nearly 6,000 jobs by 2025, besides increasing the share of digital transactions to 70 percent of all financial dealings.