RIYADH, 18 January 2007 — The Saudi Credit Bank is considering a scheme for extending loans to those sections of the population who do not qualify for financial assistance from the Real Estate Development Fund (REDF) or other sources of funding.
Minister of Finance Ibrahim Al-Assaf disclosed this at a two-day housing finance conference that concluded here yesterday.
Richards Banks, director, Middle East, Euromoney Conferences, said the recommendations of the conference will be submitted to Custodian of the Two Holy Mosques King Abdullah, whose own initiative in this regard has made a meaningful contribution in providing housing for the poor. The Kingdom requires 160,000 housing units annually and the real estate sector needs an investment of SR1 trillion to tackle current housing shortage.
Dar Al Arkan, a real estate development company and one of the organizers of the conference, unveiled its scheme for the launch of an SR1 billion real estate company that will provide houses under an installment scheme. The limited liability company, which will be later converted into a joint stock one, will be a joint venture with the International Finance Corporation (IFC), the Arab National Bank and the Housing Development Finance Corporation (HDFC) of India.
Referring to the housing shortage, Al-Assaf said the Saudi Credit Bank was working on creating a financing mechanism for households with no sources of funding to rely on. “The Public Pension Agency has approved a program for providing long-term financing on terms that are suitable to both the agency and the borrowers, for the purchase of housing by state employees participating in the civil and military pension system,” the minister said, adding that the scheme would be operational by the middle of this year. This was in addition to an allocation of SR10 billion that the government has approved for the low-income housing scheme.
Hamad Al-Sayari, governor of the Saudi Arabian Monetary Agency (SAMA), said the Kingdom has injected an additional SR9 billion into REDF’s capital, bringing the total to SR92 billion. This reflects the government’s concern over the need to address housing shortage, he observed.
Muhammad Al-Kharashi, governor of the Public Pension Agency, said the real estate sector, one of the fastest-growing sectors in the Kingdom, has an investment potential of around SR1 trillion. He disclosed that the board of directors of the agency has approved its plan under which the agency would purchase houses and resell them to the people.
