Saudi bank loans surge to $700b, fuelled by real estate

RIYADH, Mar 13 (Arab News): Saudi banks extended loans totaling SR2.62 trillion ($700 billion) in January, marking an 11 percent rise from the same month in 2023, according to official data.
Figures released by the Kingdom's central bank showed an increase in personal loans accounted for 33 percent of this growth, while the remaining 67 percent was attributed to the expansion of corporate lending, particularly for real estate activities, as well as electricity, gas, and water supplies.
The surge in real estate loans within corporate activities can be credited to Saudi Arabia's expansive giga-projects, which have mitigated the impact of rising borrowing rates associated with high interest rates.
Personal loans, which include all types of credit provided to individuals, amounted to SR1.25 trillion in January, showing an annual rise of 7 percent.
The personal loan market in Saudi Arabia has been on a significant growth trajectory, as reported by market research company SPER. This expansion is propelled by various key factors, including the demand for residential properties from expatriates entering the Kingdom, as well as government initiatives focused on modernizing the financial system.
The rapid advancement of digitization, resulting in swift lending and approval processes, is also a significant contributor to the market's growth. Furthermore, the growing number of new entrants in the personal finance sector in Saudi Arabia is poised to create lucrative opportunities for further expansion in the near future. Advisory and consulting firm Ken Research highlighted that the rising number of working women in Saudi Arabia is on a steady incline, a trend that is forecasted to propel growth in the market and yield positive outcomes for the Saudi personal finance market.