RIYADH — The Saudi Export Development Authority (Saudi Exports) launched the Export Finance Enhancing Initiative under the Private Sector Stimulus Plan by signing agreements with the Saudi Industrial Development Fund and the International Islamic Trade Finance Corporation (ITFC)

Non-oil exports are one of the fundamental pillars of Vision 2030 under a Royal Decree approving the Private Sector Stimulation Plan and allocating SR5 billion to the initiative to enhance Saudi exports financing as a part of the capital of Saudi Export Import Bank (Saudi EXIM Bank). Enhancing exports financing is one of the National Industrial Development and Logistics Program’s initiative for which the Saudi Exports is tasked with completing the required statutory measures.

Saudi Exports is currently working on establishing Saudi EXIM Bank which will be launched in early October 2019, and will provide integrated financial solutions and services to Saudi exporters. To ensure available support to the exporters until the establishment of Saudi EXIM Bank, Saudi Exports has worked with the Private Sector Stimulus Office under the Private Sector Stimulus Plan and signed two agreements to finance the exporters until the launch of the bank.

One agreement was signed with Saudi Industrial Development Fund (SIDF) to provide financing to local exporters as well as international buyers of Saudi commodities. A sum of SR4 billion has been allocated to the initiative. This sum is a part of the capital of Saudi EXIM Bank to be established in accordance with the Royal Decree no. 14393, issued on 25/3/1439 H approving the initiative to enhance exports financing as a part of private sector stimulus plan.

In addition, another agreement was signed with International Islamic Trade Finance Corporation (ITFC) to provide financing to local exporters and international buyers of Saudi commodities. A sum of SR1 billion has been allocated to the initiative. This sum is also a part of the capital of Saudi Export-Import Bank to be established.

The launch of the Exports Finance Enhancing Initiative is considered a positive step toward the development of Saudi exports, as financing helps exporters to complete transactions that they couldn’t otherwise have carried out due to lack of funding or due to the buyer’s (importer) need for financing.

In addition, exporters in all sectors – excluding crude oil – can apply for finance via Saudi Export Development Authority website to benefit from financing products that include financing the international buyers by providing financing required to the importers with whom Saudi exporter is dealing, pre-shipping financing which provides financing required to working capital, and export credit insurance which is the insurance provided to exporters to overcome the difficulty of obtaining export revenue either for commercial, political or other reasons.

The National Export Strategy supports the launch of Saudi EXIM Bank which will stimulate the growth of non-oil exports; It is expected that each SR1 million from the financing provided by Saudi EXIM Bank will contribute to increase the non-oil exports by between SR2 to 3 million. In addition, the Export Finance Enhancing Initiative within the private sector stimulus plan will contribute to the competitiveness of several segments of the national economy and develop its products. It will also improve the Kingdom’s business and investment environment, and will promote the developmental role of the private sector in the national economy according to the Kingdom of Saudi Arabia Vision 2030.

Saudi Exports employs all its capabilities to improve the efficiency of the export environment, overcome the barriers that exporters may face, raise awareness about export practices, and develop human competencies in the field of export. It is also working to raise the export readiness of the targeted enterprises through an assessment of the export readiness and consultation services to improve the export capacity of the target enterprises.

Saudi Exports also facilitates the creation of suitable opportunities and export markets for enterprises by providing markets reports and studies. Moreover, it contributes to the emergence of Saudi products to the target markets through participation in international exhibitions and matches exporters with international buyers through trade missions and bilateral meetings on the sidelines of international exhibitions.

The efforts of Saudi Exports are guided by the Saudi Vision 2030 and in response to the aspirations of the wise leadership toward diversifying the sources of income of the national economy. — SG