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Saudi central bank sets capital requirement for microfinance companies

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Saudi central bank sets capital requirement for microfinance companies

Saudi Arabian microfinance companies must hold a minimum paid-up capital of 20 million Saudi riyals, according to new rules imposed by the central bank.

The Saudi Arabian Monetary Authority said Dec. 10 that it may increase or decrease the threshold depending on market conditions. It also prescribed that microfinance consumer companies may only grant up to a total of 50,000 riyals in financing to a beneficiary.

The central bank noted that the move was geared toward "enhancing financial stability and supporting the growth and economic development" in line with the country's Vision 2030 ambition to reduce its dependence on oil, while simultaneously diversifying its economy and developing public service sectors.