Masraf Al Rayan and investors obtain license to operate SR1.2bn consumer finance company in KSA

Other major investors include Al Abdullatif Investment Group, Eng. Abdul Mohsen A. Zakary and Sheikh Ali Al Jedaie.

In line with Masraf Al Rayan's policy to expand into the GCC, Mr. Adel Mustafawi, CEO Al Rayan, announced the bank's role as a strategic partner alongside Saudi shareholders to establish "Kirnaf Instalment Company," a consumer finance company based in Riyadh, Saudi Arabia.

Kirnaf Instalment Company is a SR1.2bn venture that will offer services such as home, car and goods financing to consumers. Masraf Al Rayan is the majority shareholder with a 20 percent stake and a seat on the board.

Kirnaf is the result of efforts by Masraf Al Rayan and Saudi businessmen who undertook extensive research on the Saudi Arabian market to assess investment and financial opportunities focusing on personal finance. The research shows that personal finance requirements grew 400 percent from the years 2000 to 2005. This growth is set to continue, reaching a total of 340 billion Saudi Riyals by 2015 from 238 billion Saudi Riyals this year.

Mr. Adel Mustafawi said that acquiring the license to establish Kirnaf was part of Masraf Al Rayan's strategy to develop in the Gulf region and beyond.

"The Saudi Arabian economy is considered one of the most developed and fastest growing in the world. According to our studies, the GDP in the Kingdom of Saudi Arabia will increase by 33% between this year and 2011 from 1.4 trillion to 1.8 trillion Saudi Riyals and the need for personal finance products will continue to rise, putting us in a prime position to capitalise on this phenomenal growth. Our involvement in projects like this supports Masraf Al Rayan's plan to pioneer the way in finance and investment activities."

The consumer finance sector is gaining momentum as one of the most influential sectors following oil and real estate in the GCC. It has proved its pivotal role in the economy of the Middle East and in specific the Saudi Arabian economy, where it is a part of the burgeoning non-oil sector which makes up 55 percent of GDP

Kirnaf Instalment is expected to operate through 45 branches spread across the Kingdom of Saudi Arabia offering an optimum level of service. It is expected that Kirnaf will lead the way for investment companies, with its innovative products and its strong management.

Mr. Mustafawi commented on this deal by saying, "This is a very exciting development for Masraf Al Rayan as our first venture into the Kingdom of Saudi Arabia and we are extremely optimistic of its potential success. We aim to continue scoping out opportunities in the region, delivering on our promise to expand within the GCC and beyond."