There is a significant shift in attitude toward personal finance management in Saudi Arabia, largely driven by a young demographic. The next generation is keen to save, invest and better manage their finances and now they have greater means and access to an array of saving and investment products. 

In fact, one of the goals of the financial sector development program, part of the Kingdom’s Vision 2030 economic and social strategy, is to promote and enable financial planning. While the public sector has a key role to play to ensure the right reforms to achieve this goal, the onus is on the private sector to also help bridge the gap between demand, which stems from knowledge and awareness, and supply, which is driven from product innovation and development.

At SEDCO Holding, we have championed financial education through our dedicated financial literacy program, Riyali, since 2012. By empowering the Kingdom’s youth to take control of their finances we are enabling prosperous socio-economic advancement, helping the country achieve its national goals, while positively contributing to the realization of global UN sustainable development goals.

The Riyali Financial Literacy program — which loosely translates as “my money” — aims to boost community financial awareness, develop people’s skills, and provide them with the knowledge and tools to enable them to take make sound investment decisions. What started off as a corporate social responsibility initiative by a Saudi-based family-owned Shariah investment powerhouse, evolved into a nationally recognized and fast-growing program endorsed by the Kingdom’s Ministry of Education.

With the unwavering support of SEDCO Holding’s shareholders, hard work and dedication of the Riyali team, coupled with the ministry enabling access to public schools, Riyali’s impact has been tremendous. To date, the financial literacy program has taught over 1.8 million people its courses are available across almost every region in the Kingdom targeting a range of age groups, from first-grade children to young adults.

As part of our efforts to measure the impact of the program, we surveyed 25,000 participants to find out how the program has affected their financial knowledge, attitude, and behavior. The results of the survey revealed that most of those who used the program gained greater confidence in managing their personal finances and significantly increased their financial knowledge. Most participants were able to apply what they learned to help improve their financial situation. The survey showed that 68 percent said they started investing or are considering it, 81 percent began to set personal budgets and 86 percent started to save after taking its courses.

We are already seeing how enhanced financial literacy among the Saudi population is changing investment and spending habits. For instance, the latest data from the Capital Market Authority, the Saudi markets regulator, shows that assets under management in mutual funds are growing and retail investor activity in the Saudi stock market has also risen. 

There is also a significant increase in the number of female investors. The amount of investment portfolio accounts held by women has increased from about one million in the third quarter of 2019 to 1.5 million in the same period last year. 

The October 2021 statistics from SAMA, the Saudi central bank, also point to higher levels of development activity in the small and medium-sized enterprise sector, with funds for micro, small and medium enterprises increasing at a healthy pace since 2018. The data also indicates higher levels of homeownership, with the total number of new residential mortgages climbing significantly in recent years. 

A final economic indicator that suggests shifting attitudes toward spending and personal debt management, is reduced dependency on consumer loans and credit cards, with the total value of consumer and credit card loans declining over the last three years. 

While several other factors are at play — such as sector reforms and policy changes — which influence the performance of these economic indicators, we can deduce that the Saudi population is moving toward greater saving and making more savvy investments.

Riyali aspires to continue expanding its reach, positively influencing members of society, and helping empower youth in Saudi to make decisions that set them on the right course toward financial resilience. 

But we believe that for Riyali to unlock greater potential the time is right to spin it off into its own independent foundation and become a conduit through which the Kingdom can achieve its goals of enabling financial planning and supporting the world to achieve some of the UN’s sustainable development goals.

• Rayyan Nagadi is a chief executive officer of SEDCO Holding.