The last eighteen months will be remembered in history as an exceptional period of unique circumstances for companies, governments and regulators around the world to grapple with. In Saudi Arabia, all key stakeholders acted quick and decisively, cushioning the economic impact and allowing for restrictions to be removed rapidly.
Looking at the financial services industry, this was observed equally for the banking sector and the non-bank financial institutions (NBFIs). While at first the Covid-19 pandemic and its consequences acted as a restraint as the need for services offered by these organizations declined due to restrained customer access to businesses. The financing sector has however recovered quickly and is expected to continue growing in the second half of 2021. This growth is testament to many financing companies rearranging their operations and accelerating internal digital transformation.
Though the NBFI sector size is not as large as other subsectors within the financial industry, it plays a pivotal role in the lending market. The NBFI sector comprises of specialized financing companies that are active in specific market segments such as real estate, automotive, equipment, consumer and micro financing.
In this first edition where we focus on the NBFI sector, we have analyzed the industry’s financial performance through the lens of twelve financing and leasing companies regulated by the Saudi Central Bank (SAMA) in Saudi Arabia, providing a directional view. In addition, we have delved into wider trends that shape the industry, including the evolving regulatory environment of the financing sector. These findings are the result of our own research and conversations with clients and industry leaders, some of which are also included in this report and to whom we are grateful for their valuable time and input.
We hope that you will find this new report insightful and we look forward to your feedback.