SHUAA launches Sharia compliant installment and lease financing business in Saudi Arabia
- Saudi Arabia: Sunday, February 03 - 2013 at 11:09
- PRESS RELEASE
SHUAA Capital psc announced the establishment of Gulf Installments Company. Following the success of Shuaa's subsidiary Gulf Finance Corporation in the UAE, Gulf Installments Company, the new Saudi-based installment company focused on providing installment and lease financing to businesses across a variety of sectors and assets will be operated by Gulf Finance under a management contract with SHUAA.
Saudi Arabia is the largest economy in the GCC, with a nominal GDP of $435bn, and is expected to grow by 4.5% in 2013. Even though Saudi SMEs account for 90% of Saudi businesses and 24.7% of total employment, they represent only 2% of the Saudi banks' lending market. With over 220,000 SMEs in the Kingdom, many of which are underserved, credit demand outpaces supply.
Dr Sabah al-Binali, Chairman of Gulf Installments, and Vice Chairman of its operator Gulf Finance, said, "Our move into Saudi Arabia is a perfect opportunity to extend SHUAA's reach into a new and dynamic market place. We have exceptional expertise within the SME space and through Gulf Installments, we are now able to offer the Saudi business community a wide range of credit solutions. These solutions are in demand by a large number of clients which paves the way for building significant market share."
David Hunt is appointed as the Chief Executive Officer of Gulf Installments in Saudi Arabia. An experienced Managing Director with over 24 years financial services experience in emerging markets and extensive regional knowledge, Mr Hunt is perfectly placed to lead the company's operation as it expands into the Kingdom. Prior to joining Gulf Installments, David held various senior and Director-level positions at the HSBC Group.
He was Managing Director and Chairman of the Executive Committee of SABB Takaful, a Saudi publicly quoted insurance company, and most recently Head of Regional Insurance at HSBC Bank Middle East. He will lead a team of seasoned bankers, financial veterans and credit professionals.
Mr Hunt said, "Gulf Installments aims to finance SMEs across a variety of sectors, from contracting and construction, to healthcare and education; whether they need to establish their business or expand it by purchasing assets such as heavy plant and machinery, medical equipment, or contracting and constructing equipment."
"There is a strong demand for our proposition as Gulf Installments will deliver Sharia compliant financing solutions to the Saudi market. Our installment and lease financing solutions offer an alternate source of funding to existing bank facilities, provide increased affordability and purchasing power, and allow our customers to enjoy long term stability for asset purchases. Furthermore, they release working capital and improve cash flow for businesses," he added.
Gulf Installments offers lease financing for a wide range of fixed assets. Lease periods are available from 1 to 4 years and can be tailored to suit the needs of each individual client based on the term, down payment and rental plan. Strategic alliances have already been negotiated with two of the top five heavy equipment vendors in the Kingdom, which will underpin the business and ensure immediate traction.
This in turn will capitalise on the significant growth within Saudi Arabia's construction industry which awarded SR270bn of contracts in 2011 up 155% on 2010. Gulf Installments is based in Jeddah and will be expanding across the Kingdom over the course of the next few years.
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