Saudi Home Loan Firm Established

RIYADH,13 December 2007 — As part of an ambitious plan to enable Saudi nationals to own houses, a major Saudi financing company with a capital of SR2 billion has been launched. The company has started receiving applications from individuals interested in seeking loan facilities, announced Abdullatif Al-Shelash, managing director of the Saudi Home Loans Company (SHL), here yesterday.

“The SHL is one of the first companies of its kind to follow Islamic housing finance system,” said Al-Shelash, while addressing a press conference. The press briefing was also attended by Dr. Robert Eid, ANB managing director, Walid Al-Marshad, investment manager for the Middle East and North Africa at the International Finance Corporation and Tahir Naseem, SHLC director of operations.

The move to establish this company is significant keeping in view the fact that only 22 percent of Saudi citizens own houses today, while a huge majority are living in rented properties.

Al-Shelash pointed out that the mission of the company was basically to serve the middle and the poor segments of Saudi population, keeping in view the fact that the Kingdom will need some 4.5 million housing units within next five years to accommodate its growing population.

Spelling out the salient features of SHL as a company, he said “this company had entered into a business alliance with Arab National Bank, whose branches can be contacted to obtain housing loan application forms.

“One can also visit SHL headquarters on King Abdul Aziz Road in Riyadh to apply for loan facilities,” said SHL chief, adding that the company will operate through the ANB branches in its first year of operation.

Plans are also afoot to use proposed SHL offices Kingdom-wide and its mobile sales offices to raise awareness about the company’s services. The company, he said, is fully geared to support and finance major real estate projects either owned by government agencies or by private firms.

The financing offer is also there for private and independent business houses, which can seek loan facilities provided they have had clean records of their income, expenditure and credit facilities.

Referring to the scope of work in housing sector, Al-Shelash said that IFC, ANB and India’s HDFC are our partners in this venture.

The HDFC, which has three decades of track record in housing finance in India, has some three million satisfied customers today.

“Our objective will be to promote home ownership by offering hassle-free loans,” said the SHLC chief, adding that the SHLC-ANB alliance would further make it more competitive in terms of providing services and in terms of geographical accessibility.

“The ANB’s involvement also confirms the conviction of the bank in the necessity to deal with the housing finance,” Eid said.

“The bank’s participation in the company comes as an expression of its strategy to focus on meeting the funding needs in the vital sectors of the Kingdom and the region,” he said, adding that the bank will play a strategic role in dealing with housing finance as a major and separate specialized activity.

The officials said that the SCHF was a closed joint stock owned by Arab National Bank(40 percent), Dar Al-Arkan for real estate development(15 percent)and the International Finance Corporation (5 percent), which make up the company’s capital.

The Saudi Arabian Monetary Agency (SAMA), which is the official regulatory authority, has given the operating license to this company.

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