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 During The Fiscal Year 1434/1435 H, The Saudi Industrial Development Fund Approved (144) Industrial Loans with Total Commitments of SR 6.7 Billion

During The Fiscal Year 1434/1435 H,
The Saudi Industrial Development Fund
Approved (144) Industrial Loans with Total Commitments of SR 6.7 Billion.
 
66% of the Value of these Loans Targeted projects In Less-Developed Areas.
 
59% of the Number of Approved Loans Benefited Small Industrial Projects.
 
During the fiscal year 1434/1435 H (2013), the Saudi Industrial Development experienced outstanding performance. This is made manifest in the Fund’s achievements, particularly in the number and value of loans approved for projects implemented in less-developed areas and towns, as well as the loans committed to small industrial projects. This is indicated, in a press release, by H.E. Ali Abdullah Al –Ayid, the Director General of the Saudi Industrial Development Fund. In the same press release, H.E. Ali Abdullah Al –Ayid explained that the Fund’s achievements during the fiscal year 1434/1435 H are compatible with the sustained growth and development of the national economy; and are, typically, a natural outcome of prodigious support extended by the Government of the Custodian of the Two Holy Mosques to the Fund as well as the other development funds in the Kingdom.
 
H.E. Ali Abdullah Al –Ayid revealed that the number of loans approved during the fiscal year 1434/1435 H (2013G) amounted to 144 loans with total commitments of  SR 6,680 million, i.e., an increase of 6% compared to the number of loans approved during the previous fiscal year 1433/1434 H (2012G). These loans were extended for assisting the establishment of 120 new industrial projects and the expansion of 24 existing ones. Investments in these projects totaled SR 14.5 billion; these projects are expected to generate 11,422 direct job opportunities. The total value of loans disbursed during the fiscal year 1434/1435 H (2013G) amounted to SR 4,930 million. Repayments of borrower projects, during the fiscal year 1434/1435 H (2013G), totaled SR 4,360 million, the highest value of loans repaid in one year since SIDF inception.
 
H.E. Ali Abdullah Al –Ayid stated that there are positive trends related to the geographical distribution of loans during the fiscal year 1434/1435 H (2013G). Loans approved for projects in less-developed areas and towns accounted respectively for 50% and 66% of the number and value of loans approved by the Fund during the fiscal year 1434/1435 H (2013G). H.E. Ali Abdullah Al –Ayid emphasized that before application of the Resolution of the Council of Ministers which increased SIDF’s financing to projects in less-developed areas and towns to a maximum of 75%  of the total cost of the project instead of 50% with a repayment period of 20 years instead of  15 years, loans granted to projects in less-developed areas and towns did not exceed, respectively, 14% and 15%  of number and value of loans approved by the Fund.
 
H.E. Ali Abdullah Al –Ayid pointed that such results provide irrefutable evidence of the success of the State’s policy of accelerating growth rates in less-developed areas and towns. Contextually, these results reflect SIDF’s trend of providing enticing incentives for industrial investment in less-developed areas and towns. Such trend will undoubtedly contribute to balanced development among the regions, utilization of the resources of the less-developed areas, increasing income levels and providing attractive job opportunities for the citizens.
 
H.E. Ali Abdullah Al –Ayid indicated that the special care given to the small industrial projects sector is among the characteristic features of SIDF’s achievements during the fiscal year 1434/1435 H (2013G). Loans granted to the sector (SR 15 million) represent 59% of the total number of loans extended by the Fund during the said fiscal year. H.E. Ali Abdullah Al –Ayid confirmed that such trend perfectly fits and ideally integrates with the State’s programs and objectives  regarding development of small industrial projects. Furthermore, such trend attests to the success of SIDF’s efforts in dealing with this category of projects. Likewise, the increasing number of industrial loan applications reflects the improvement of the economic environment in which these projects operate as well as the spread of investment awareness among minor industrial investors.
 
Regarding the investors’ stance on industrial investment, H.E. Ali Abdullah Al –Ayid explained that statistics of the fiscal year 1434/1435 H (2013G) provide definitive indicators of the increasing number of the new industrial projects vis-a- vis expansion of existing industrial plants. The number of loans approved for new projects amounted to 120 loans with commitments totaling SR 5,542 million; thus representing 83% of the number and value of loans approved during the year. 
 
H.E. Ali Abdullah Al –Ayid said that the number of loans approved by the Fund since its inception in 1394 H up to the end of the previous fiscal year 1433/1434 H (2012G) has totaled 3624 loans with a gross value of SR 112.1 billion committed to assisting the implementation of 2592 industrial project all over the Kingdom. Of the gross total of committed loans, a sum of SR 75.6 billion was disbursed and a total of SR 45.9 billion was repaid as of the end of the fiscal year 1434/1435 H (2013G). SIDF’s solid support has made a marked impact:  national factories were able to satisfy the local market needs for numerous products; many were in the position to export their surplus products besides the employment opportunities provided to the Saudi nationals. These achievements confirm the success of the beneficiary borrower projects.
 
Cumulative amount of loans approved by the Fund since its inception up to the end of the fiscal year 1434/1435 H (2013G) has been distributed among the different industrial sectors inasmuch as: SR 44.1billion or 39.4% to the Chemical Industries Sector; SR 22.4 billion or 20% to the Engineering Industries Sector; SR 18.9 billion or 16.8% to the Consumer Industries Sector; SR 12.2 billion or 10.8% to the Other Building Materials Industries Sector; SR 11.5 billion or 10.3% to the Cement Industry Sector; and SR 3 billion or 2.7% to the Other Industries Sector.
 
The Fund-run Small & Medium Enterprises Loan Guarantee Program (Kafala) continued its distinguished performance in developing and upgrading the small and medium enterprises in order to augment their contribution to the national socio-economic development. During the fiscal year 1434/1435 H (2013G), the Program issued 2515 guarantees totaling SR 1,286 million against commercial bank’s credits of SR 2,347 million. These guarantees were issued in favor of 1173 small and medium enterprises. Compared to the previous fiscal year 1433/1434 H (2012G), these figures indicate an increase of 51% in the number of guarantees; 36% in the value of guarantees; 33% in the finance provided by commercial banks; and 28% in the number of enterprises benefiting from the guarantees. Hence the cumulative guarantees issued by the Program since its establishment up to the end of the previous fiscal year totaled 7280 in terms of number and SR 3,590 million in terms of value. These guarantees were issued - against cumulative bank’s financing of SR 7,183 million – in favor of 4082 small and medium enterprises engaged in activities encompassing all economic sectors Kingdom-wide. 
 
H.E. Ali Abdullah Al –Ayid concluded by expressing his deep indebtedness to the Custodian of the Two Holy Mosques and his faithful Crown Prince for their steadfast support of the Fund in service of economic development in general and industrial development in particular. He, also thanked H.E. the Minister of Finance and SIDF’s Board of Directors for their sagacious direction and monitoring of the Fund’s activities in service of the industrial sector and the investors in all parts of the Kingdom. Furthermore, he thanked all SIDF employees for their dedicated efforts commended by our wise leadership and those interested in the Kingdom’s economy in general and the industrial sector in particular.

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