FSDP Program Book

Financial Sector Development
Program Charter
Delivery Plan 2020
2 Financial Sector Development Program
3
Table of contents
List of key abbreviations 4
Chapter 1: Financial Sector Development Program Scope 7

A) Financial Sector Development Program Description 8
B) Vision 2030 Objectives Directly related to the Financial Sector 8
Development Program
C) Vision 2030 Objectives Indirectly related to the Financial Sector 9
Development Program

Chapter 2: Financial Sector Development Program Aspirations 11
A) 2030 Aspirations 12
B) 2020 Commitments 13
C) Financial Sector Development Program Metrics and Targets 15

Chapter 3: Current Status 23
A) Major Challenges 24
B) Current Efforts 31
Chapter 4: Program Strategy 33

A) Strategic Pillars 34
B) Strategic Considerations 38
C) Tradeoffs and Interdependencies with other VRPs 40
Chapter 5: Initiatives Portfolio 43

A) Initiatives Portfolio 44
B) Game-Changers 54

Chapter 6: Enablers 63
A) Governance Model 64
B) Risk Mitigation and Required Actions 66
List of key abbreviations

AP: Authorized Person
AuM: Assets under Management
CAGR: Compounded Annual Growth Rate
CCHI: Council of Cooperative Health Insurance
CCP: Central Counterparty
CEDA: Council of Economic and Developmental Affairs
CMA: Capital Market Authority
DCM: Debt Capital Markets
DMO: Debt Management Office
ECM: Equity Capital Markets
ETF: Exchange Traded Funds
FDI: Foreign Direct Investment
FLE: Financial Literacy Entity
FSDP: Financial Sector Development Program
GAZT: General Authority of Zakat and Tax
GCC: Gulf Cooperation Council
GDP: Gross Domestic Product
GOSI: General Authority of Social Insurance
GWP: Gross Written Premiums
IDPS: Integrated Digital Payment Strategy
IPO: Initial Public Offering
JCC: Job Creation and Employment Commission
KYC: Know Your Customer
LDR: Loan Deposit Ratio
MEP: Ministry of Economy and Planning
MSME: Micro, Small and Medium Enterprises
MOCI: Ministry of Commerce and Industry
5
MoH: Ministry of Housing

MoI: Ministry of Interior
MoJ: Ministry of Justice
MoL: Ministry of Labor
NDU: National Digitalization Unit
NIDLP: National Industrial Development and Logistics Program
NPL: Non-performing Loans
NSE: National Savings Entity
NTP: National Transformation Program
PE: Private Equity
PIF: Public Investment Fund
PMO: Program Management Office
PPA: Public Pension Agency
PoS: Point of Sale
REDF: Real Estate Development Fund
SDB: Saudi Development Bank
QFI: Qualified Foreign Investor
ROA: Return on Assets
SAGIA: Saudi Arabian General Investment Authority
SAMA: Saudi Arabian Monetary Authority
SCEP: Saudi Character Enrichment Program
SME: Small and Medium Enterprises
SPP: Strategic Partnerships Program
SRC: Saudi Real Estate Refinancing Company
VC: Venture Capital
VRP: Vision Realization Program
Chapter 1
7
Financial Sector Development Program - Scope

A) Financial Sector Development Program Description
B) Vision 2030 Objectives Directly related to the Financial Sector
Development Program
C) Vision 2030 Objectives Indirectly related to the Financial Sector
Development Program
1. Scope of Financial Sector Development Program

A) Financial Sector Development Program Description
On April 24, 2017, the Council of Economic and Development Affairs (CEDA) launched
ten delivery programs to realize Vision 2030. The most prominent of these programs is the
Financial Sector Development Program (FSDP) that aims at developing the national economy
and contribute to achieving the remaining VRPs.
The FSDP’s role is to create a diversified and effective financial services sector to support the
development of the national economy, diversify its sources of income, and stimulate savings,
finance, and investment. The FSDP will achieve this ambition by enabling financial institutions
to support private sector growth, ensuring the formation of an advanced capital market, and
promoting and enabling financial planning, without impeding the strategic objectives intended
to maintain the financial services sector’s stability.
B) Vision 2030 Objectives Directly related to the Financial Sector Development Program
The FSDP has 3 main objective that contribute to achieving vision 2030:
First Objective: Ensure the formation of an advanced capital market
Second Objective: Enable financial institutions to support private sector growth
Third Objective: Promote and enable financial planning (retirement, savings, etc.)
( Table Nº 1 ) Level 1 Level 2 Level 3
1 Strengthen Islamic values

& national identity
Grow contribution of the Private
Sector to the economy
Enhance ease of doing business
Vibrant society
2 Enable fullfilling lives Maximize value captured from
the energy sector
Unlock state-owned assets for
the Private Sector
3 Grow & diversify the Economy Unlock potential of non-oil sectors Privatize selected
government services
A Thriving
Economy
4 Increase employment Grow the Public Investment Fund’s
assets and role as a growth engine
Ensure the formation of an
advanced capital market
5 Enhance government effectiveness Position KSA as a global logistic hub

Enable financial institutions
to support Private Sector growth
An Ambitious
Nation
6 Enable social responsibility Further integrate Saudi
Economy regionally & globally
Attract foreign direct investment
Grow non-oil exports Create special zones for

rehabilitate economic cities
Enable citizen responsibility Promote & enable financial planning
Enable social contribution Encourage volunteering

of businesses
Enable larger impact of

non-profit sector
Vision 2030
9
C) The FSDP also indirectly contributes to 19 other Vision 2030 objectives:
1. Grow and capture maximum value from 11. Develop economic ties with the region
the mining sector beyond GCC
2. Develop the digital economy 12. Develop economic ties with global
3. Localize promising manufacturing partners
industries 13. Support national champions consolidate
4. Localize military industry their leadership globally
5. Enable the development of the retail 14. Develop promising local companies into
sector regional and global leaders
6. Unlock state-owned assets for the Private 15. Grow contribution of renewables to
Sector nation energy mix
7. Increase localization of non-oil sectors 16. Attract foreign direct investment
8. Enable the development of the tourism 17. Grow SME contribution to the economy
sector 18. Enable suitable home ownership among
9. Privatize selected government services Saudi families
10. Push forward the GCC integration 19. Support growth of non-profit sector
agenda
Chapter 2
11
Financial Sector Development Program Aspirations

A) 2030 Aspirations
B) 2020 Commitment
C) Financial Sector Development Program Metrics and Targets

2. Financial Sector Development Program Aspirations
A) 2030 Aspirations
The Financial Sector Development Program’s objective is to create a thriving financial sector
that serves as a key enabler in achieving Vision 2030’s objectives. By 2030, the sector is
expected to grow large enough to fund Vision 2030 objectives, offer a diverse set of products
and services through traditional and newly emerging players, give citizens thus far excluded
from the financial system access to it with an inclusive structure, achieve a high degree of
digitization and maintain financial stability.
First, the sector is expected to grow to achieve a sufficient level of financial assets relative
to GDP ratio. Growth will be commensurate with an increase in private sector involvement in
GDP creation, while reducing oil sector and government contributions in line with Vision 2030
objectives.
Second, in terms of diversity, a transformational change will occur. On one hand, the share of
capital markets assets as a percentage of financial assets (total domestic market capitalization
and outstanding debt issuances registered at the exchange) is expected to increase. On the
other, emerging players (i.e., FinTechs) are expected to stimulate innovation and competition
by 2030.
Third, significant improvement toward an inclusive structure will be realized in two ways: an
increase in bank account penetration across the adult demographic in the Kingdom, and greater
access to productive financing assets such as SME lending and mortgages. Accordingly, it is
anticipated that the share of SME financing, together with share of mortgages in banks, will
increase.
Fourth, the program envisions a digitized infrastructure that moves toward a cashless society.
Accordingly, the share of non-cash transactions (in absolute number of transactions) is
expected to increase. Moreover, the sector will provide superior customer experience and
achieve higher operational efficiency.
Finally, and of critical importance, the program aims to maintain financial stability. This will
ensure long-term sustainability and continued health of the financial services sector. In doing
so, the program has been designed to comply with international standards of financial stability,
including BIS1 and IOSCO2 requirements.
1) Bank for International Settlements

2) International Organization of Securities Commissions
13
B) 2020 Commitments
As it looks forward to 2030 aspirations, the program has also defined a set of commitments to
be achieved by 2020 that will constitute the foundations in the realization of 2030 aspirations.
First, to continue the growth trajectory required to achieve 2030 aspirations, the Financial
Sector program commits to increasing the total size of financial assets to GDP ratio to reach
201% by 2020 from 192% registered in 2016.
Second, to further diversify the structure of financial services sector, the program will increase
share of capital markets assets (total domestic market capitalization and outstanding debt
issuances registered at the exchange) from 41% in 2016 to 45% by 2020. Furthermore,
emerging players (FinTechs) in the financial services sector will begin to spur innovation and
growth.
Third, to enhance inclusiveness and productive financing, the program commits to increasing
the share of SME financing at banks from the 2% level currently to 5% by 2020. Similarly, the
share of mortgages in bank financing will increase to 16% by 2020 from its 2016 level (7%).
Fourth, to achieve digitization aspirations, specifically a cashless society, the program commits
to increasing the share of non-cash transactions from 18% in 2016 to 28% by 2020.
Lastly, as previously mentioned, the program commits to fully complying with international
standards to ensure the overall financial stability of financial services sector.
2020 Commitments
( Table Nº 2 )
2016 level
Rationale 2020 commitments
Financial sector
Financial assetasset
sector Output from FSDP VRP Funding Model based on agreed Financial Sector
to GDP (%) (%)1 192% (4.7 trillion
assumptions with Saudi
SAMARiyals)
and CMA 201% (6.3 trillion Saudi Riyals)
to GDP
Share of ECM 2
Share of3ECM andand
DCM Output from FSDP VRP Funding Model based on agreed Financial Sector
DCM in thesector
financial 41% (1.9 trillion
assumptions withSaudi
SAMA Riyals)
and CMA 45% (2.68 trillion Saudi Riyals)
in the financial (%)
sector (%)
Number
Number of adults
of adults with
with a
a bank account 4 74% on linear growth assumption toward achieving
Based 80%the 2030 target
bank account (%) (%)
Share of non-cash
Share of non-cash 18% on SAMA estimates; linear growth from as-is
Based 28%to 2030 target
transactions5 (% of total)
transactions (% of total)
[1]. The ratio represents loans from banks, specialized credit institutions, domestic market capitalization (excluding the market capitalization of potential
ARAMCO listing) and debt registered at the exchange.
2. Equity capital markets target defined based on increase in the domestic market capitalization of the exchange (excluding the market capitalization of
potential ARAMCO listing) driven by growth in listings through privatization program as well as listings from the private sector.
3. Debt capital markets target defined based on increase in debt registered at the exchange, including issuances of the government, issuances of the Saudi
Real Estate Refinance Company (SRC), and the funding needs of the private sector outside the banking sector.
4. Number of adults (15 years and above) who have at least one active bank account
5. Number of card based, electronic and ACH transactions.
( Table Nº 3 )
Rationale
Financial sector asset Output from FSDP VRP Funding Model based on agreed Financial Sector
to GDP (%) assumptions with SAMA and CMA
Share of ECM and DCM Output from FSDP VRP Funding Model based on agreed Financial Sector
in the financial sector (%) assumptions with SAMA and CMA
Number of adults with a

Based on linear growth assumption toward achieving the 2030 target
bank account (%)
Share of non-cash Based on SAMA estimates; linear growth from as-is to 2030 target
transactions (% of total)
[1]. The ratio represents loans from banks, specialized credit institutions, domestic market capitalization (excluding the market capitalization of potential
ARAMCO listing) and debt registered at the exchange.
2. Equity capital markets target defined based on increase in the domestic market capitalization of the exchange (excluding the market capitalization of
potential ARAMCO listing) driven by growth in listings through privatization program as well as listings from the private sector.
3. Debt capital markets target defined based on increase in debt registered at the exchange, including issuances of the government, issuances of the Saudi
Real Estate Refinance Company (SRC), and the funding needs of the private sector outside the banking sector.
4. Number of adults (15 years and above) who have at least one active bank account
5. Number of card based, electronic and ACH transactions.
15
C) Financial Sector Development Program Metrics and Targets
1) Establishing the level of ambition
Achieving the objectives and aspirations of the Vision will require a transformational change
in the structure and scale of the existing Saudi economy. Vision 2030 aspires to reduce Saudi
Arabia’s dependence on the oil industry and to foster the development of private sector.
Estimates from the Ministry of Economy and Planning forecast the tripling of Saudi GDP by
2030 to >6T SAR from what it is today (2.4T SAR).
Tripling the size of the economy will require significant funding requirements for the required
projects and investments of the Vision. As such, a detailed assessment of funding requirements
has been conducted and the size of financing sector has been determined. Two methodologies
have been utilized for this assessment:
• A top-down benchmarking methodology, which analyzes the historical relationship between

GDP and the primary financial sector assets of countries with similar characteristics to Saudi
Arabia’s economic aspirations in 2030 and applies them to determine Saudi Arabia’s required
Financial Sector size for projected GDP levels.
• A Saudi Arabia-specific analysis, which analyzes historic relationship between growth in
financial service sector and growth in government, oil industry and private sector, and projects
the future funding requirements of KSA’s economic sectors by 2030. The methodology
applies additional assumptions regarding structural shifts in the nature and size of financing
in the oil industry and government.
2) Contribution of the VRP to the macro-economic metrics
Key macro-economic metrics impacted by the program have been identified and assessed by
working with relevant teams from the Ministry of Economy and Planning and the Ministry of
Labor and Social development.
More importantly, it is critical to emphasize the nature of the FSDP as a key facilitator of the
other VRPs and Vision 2030 more broadly. The development and strengthening of the financial
services sector is the cornerstone to the development of the Saudi economy and aspirations
articulated in Vision 2030. The targets below take into account the direct impact only, and do
not evaluate the indirect influence achieved by facilitating economic growth overall.
Macroeconomic indicators ( Table Nº 4 )
Metric name 2016 2018 2019 2020 Rationale

GDP % - - - %0,2 Key drivers include credit
to the private sector and
increasing the stock market
capitalization in order to
provide adequate funding
for the aspirations of the
Kingdom's Vision 2030
Employment - 200 400 800 Key drivers include the
in Private establishment of FinTech
Sector, # of companies, the development
additional of asset management and
jobs insurance sector. Given the
trends through digitalization,
financial sector and the
banking sector will not
be a major driver in direct
employment generation.
Meanwhile, the program
aims to maintain the level of
localization within the sector.
Contribution - 43,5 47,1 50,7 The main factor is the
to local remaining Cash in the
content Kingdom
B SAR
Non- oil - 0,22 0,43 0,75 Through increased Tax
revenues, and Zakat based on the
profitability growth in the
sector
Non- - - - - The program’s impact on
Government the non-governmental
investment investment is negligible,
where planned investments
of the sector will be sufficient
to advance the aspirations
of the program (i.e., no
additional investments
required by the sector due to
the program)
17
( Table Nº 5 )

Balance of - - - - The program’s impact
Payment, on Balance of Payments
B SAR (specifically current account
balance) is negligible, where
the planned imports of the
sector will be sufficient
to achieve the program’s
objectives (i.e., no additional
imports of substance due to
the program directly in the
financial sector)
Consumption - - - %96 Program aims to mainly
rate, in % increase financing for
productive producing
assets. This implies a
relatively negative impact on
consumption.
Inflation, in % %0,79 Deposit growth as a key
factor contributing to the
growth of the cash reserve
base.
3) Program Metrics
( Table Nº 6 )

Financial sector 192% 196% 198% 201% Output from
assets to GDP, FSDP VRP
Funding Model
based on agreed
Financial Sector
assumptions
with SAMA and
CMA
Share of ECM 41% 42% 43% 45% Output from
and DCM in the FSDP VRP
financial sector, Funding Model
% based on agreed
Financial Sector
assumptions
with SAMA and
CMA
# of adults with 74% 77% 79% 80% Based on
a bank account linear growth
assumption
toward
achieving the
2030 target
Share of 18% 23% 25% 28% Based on SAMA
non-cash estimates; linear
transactions, growth from as-
is to 2030 target
( Table Nº 7 )
Metric
Type
“Enable Total GWP to 2.1% 2.5% 2.7% 2.9% Driven by stronger
financial GDP non-oil, enforcement of mandatory
institutions insurance
to support
# of Fintech - - - 3 Global benchmarking and
private sector
players SAMA input
growth”
metrics SME loans as % 2% 2% 3% 5% Modest growth to 2020,
of bank loans driven by need to establish
necessary ecosystem prior
to incentivizing banks to
finance SMEs (in line with
benchmarks)
Value of SME - - 13 23 Based on CMA estimates
funding through
PE/VC vehicles,
Bn SAR
Life GWP per 33 35 37 40 Based on SAMA Saudi
capita, SAR Insurance Market Report,
2016
19
Metric
Type
“Enable Coverage ratio 38% 40% 42% 45% Health insurance:
financial of insurance (health) (health) (health) (health) Enforcing insurance for
institutions schemes, 45% 55% 65% 75% small/medium sized
to support % (motor) (motor) (motor) (motor) companies which currently
private sector has low current coverage
growth” ratio
metrics Motor insurance:
assuming mandatory
motor insurance covers all
vehicles in KSA
Share of 18% 23% 25% 28% Based on SAMA estimates;
non-cash linear growth from as-is to
transactions, % 2030 target
Outstanding 290 304 368 502 Meeting residential
real estate requirements of Saudi
mortgages, Bn citizens.
SAR Defined by the Housing
VRP
“Ensure Total market 78% >=81% >=83% >=85% Output from FSDP VRP
formation capitalization Funding Model based on
(shares and agreed Financial Sector
of an debt) as % of assumptions with SAMA
advanced GDP and CMA
capital
Assets under 12% >=15% >=18% >=22% Baseline and 2020
market” Management, as estimates from CMA
metrics % of GDP Strategy report; selected
emerging markets
benchmarks for setting
2020 commitments and
2030 aspirations
Market 57% 56% 56% 55% Based on alignment
concentration discussions with CMA and
of top 10 selected emerging markets
companies by
market cap , in
%
Institutional 18% >=19% >=19% >=20% Baseline and 2020
investors’ share estimates from CMA
of value traded Strategy report; selected
% emerging markets
benchmarks for setting
2030 aspirations
( Table Nº 8 )
Metric
Type
“Ensure Foreign Investor 4% >=5% >=10% >=15% Baseline and 2020
formation ownership of the estimates from CMA
equity market Strategy report; selected
of an cap , in % emerging markets
advanced benchmarks for setting
capital 2020 commitments and
market” 2030 aspirations
metrics # of micro
and small cap
Based on alignment
companies
discussions with CMA;
listed, as % of 34% >=36% >=39% >=40%
assumed linear growth
total number
between today and 2020
of companies
listed
Share of
investment
accounts 0% 0% 5% 10% Global benchmarking
opened through
eKYC,
Minimum free
float of equity
market cap., Based on alignment
46% >=45% >=45% >=45%
in % of total discussion with CMA
outstanding
shares
Total amount
Output from FSDP VRP
of savings
Funding Model based on
held in savings 315 345 367 400
agreed Financial Sector
products,
assumptions with SAMA
B SAR
Number of
available types
Based on approved
of savings
“Promote recommendations from
products, 4 4 5 9
and enable National Savings Strategy
Absolute
financial Steering Committee 3#
number
planning
(retirement,
savings, etc.)” % of Based on approved
metrics households recommendations from
19% 19% 25% 29%
savings on a National Savings Strategy
regular basis Steering Committee 3#
Share of A/C
opened through
eKYC, - 2% 5% 10% Global benchmarking
%
21
Metric
Type
Household
savings ratio, %
6.2% 6.4% 7/0% 7.5% Global benchmarking
of disposable
income
Assuming a 2020 GDP of 3.15T SAR and a 2030 GDP of 6.3T SAR, we project the following
figures for the previously outlined metrics:
( Table Nº 9 )
Metric
Type
Total market Funding Model based on
capitalization, Tr >=2.24 >=2.45 >=2.68 agreed Financial Sector
SAR assumptions with SAMA
and CMA
MEP Macro-
economic Baseline and 2020
indication estimates from CMA
Assets under Strategy report; selected
Management, Tr >=0.41 >=0.53 >=0.69 emerging markets
SAR benchmarks for setting
2030 aspirations
Program-level Financial sector Funding Model based on
4.66 5.43 5.86
metric assets, Tr SAR agreed Financial Sector
assumptions with SAMA
“Enable
financial
institutions
Total GWP, Bn Driven by enforcement of
to support 50 61 75
SAR mandatory insurance
private sector
growth”
metrics
Baseline and 2020
“Ensure
estimates from CMA
formation of
Assets under Strategy report; selected
an advanced
Management, Tr 0.29 0.29 >=0.41 >=0.53 emerging markets
capital
SAR benchmarks for setting
market”
metrics
2030 aspirations
Chapter 3
23
Current Status
A) Major challenges
B) Current Efforts
3. Current Status
Prior to designing the program’s strategy, the current situation has been studied from two
primary angles: first, major challenges facing the financial services sector and second, on-
going transformation efforts that are aligned with Program aspirations. This section provides
details on both of these aspects.
A) Major Challenges
This program addresses the major challenges faced by the financial services sector in five key
areas:
i. High dependence on bank financing

Financial services are mainly driven by bank financing. Share of equity capital markets,
measured in terms of domestic market capitalization, and debt capital markets, measured in
terms of registered debt at the exchange, stood at 78% of GDP in 2016.
( Chart Nº 1 ) ( Chart Nº 2 )
Furthermore, debt capital markets appear to be completely illiquid Overall, debt capital markets are limited in size
Breakdown of total debt and equity issued,2016, as % of total issuance
%490 • 80-90% of local bond

500 %408 100
Issued purchased by local banks
6 6 10 13 17 24 82
treasuries by relationship based
pricing, hindering tradability due to
75
limited attractiveness.
%241 • Therefore, pricing not fully reflect
true risk rating ECM
200 50
94 94 90 87 83 76 DCM
%114
100 %67 25
18
%0 %0 %0 %4
0 0
Moreover, equity capital markets are highly concentrated. Total market capitalization of SABIC
and the financial sector is >40% of total equity market capitalization alone. The program’s
objective is to address this challenge by diversifying the sector similar to the actions of other
comparable countries.
Yet, relatively related number of large cap stocks compared to regional peers Relatively high market concentration of top 10 stocks by market cap
Breakdown of listed companies by size Total market cap, of top 10 stocks, as % of total market cap
%74
%57
%4 %30 %37 %28
%60
%45 %13 %22 %20
%44
%29 %15 %25 %30 Large
Mid %40
%50 %21 %21 %8
Small %35 GCC
%55 %24 %15%6 Micro Emerging
%21
0 25 50 75 100 Developing
%32
25
In addition, Saudi Arabia has a nascent asset management industry. In 2016, the assets under
management to GDP stood at 12%. This also affects the nature of trading activity in the
exchange, where share of institutional investors at 18% as measured in 2016 trading is low.
Breakdown of value turnover by investor geography
Breakdown of value turnover by investor type
HKeX %47 %53
QSE %48 %52

Bursa Malaysia %22 %78
DFM %55 %45
HKeX %30 %70
Bursa Malaysia %73 %27
Foreign
Tadawul %82 %18 Institutional
Tadawul %95 %5
Domestic
Retail
0 25 50 75 100
0 25 50 75 100
% of value traded (2016) % of value traded (2016)
ii. Gaps in financial inclusion and productive financing

One of the key success factors of a thriving financial services sector is its ability to serve a
broad set of economic players. In 2016, 74% of adults had a bank account in Saudi Arabia,
while developed markets registered over 90% inclusion. More specifically, financial inclusion
among female adults and residents in rural areas is low at 61% and 72%, respectively, in 2016.
KSA behind peers in terms of the share account holders

at a formal financial institution
Overall Female Income, bottom 40% Rural

99 99 96 99
99 99 96 99
96 96 96 98
96 96 95 93
94 96 87 90
81 78 76 74
69 69 63 72
69 65 58
69
68 61 55
63
57 44 51
54
53 39 44
29
36 37 29
28
27 22 22
All figures in %
Financial services sector also has room for significant improvement in providing financing to
SMEs and increasing penetration of mortgages through banks. In 2016, the share of SME
‫اﻟﻘﺮوض‬
financing ‫ﻣﻦ‬assets
in banking 5% ‫ﻣﻦ‬ ‫أﻗﻞ‬
stood at ‫واﻟﻤﺘﻮﺳﻄﺔ‬ ‫اﻟﺼﻐﻴﺮة‬financing
<5% and in mortgage ‫اﻟﻤﻨﺸﺂت‬ ‫إﻗﺮاض‬
at 7%. ‫ﻧﺴﺒﺔ‬
Finally, fostering
‫اﻟﻤﺮﺟﻌﻴﺔ‬
development of certified ‫اﻟﻤﻘﺎﻳﻴﺲ‬
credit ‫ﺑﻜﺜﻴﺮ ﻣﻦ‬
bureau agencies ‫أدﻧﻰ‬
and ‫ﻧﺴﺒﺔ‬
rating firms‫وﻫﻲ‬
would،‫اﻟﺘﺠﺎرﻳﺔ‬
improve risk assessment
capabilities in the Kingdom.
( Chart Nº 3 )
SME lending as a percentage of bank loans
KSA total SME Estimated KSA

outstanding loans: in the Kingdom SME share of
SAR 1420 billion SAR 32 billion lending is about 2%
Proportion (%) of SME lending in total commercial loans
74% 65% 16% 38% 36% 23% 22% 21% 19% 13% 2%
Average SME in benchmarks is about 33%
‫ ﺗﻘﺮﻳﺮ ﻋﻦ ﺗﻤﻮﻳﻞ اﻟﺸﺮﻛﺎت اﻟﺼﻐﻴﺮة‬،‫ ﻣﻨﻈﻤﺔ اﻟﺘﻌﺎون اﻻﻗﺘﺼﺎدي واﻟﺘﻨﻤﻴﺔ‬،‫ ﻣﺆﺳﺴﺔ اﻟﻨﻘﺪ اﻟﻌﺮﺑﻲ اﻟﺴﻌﻮدي‬:‫اﻟﻤﺼﺪر‬
2016 ‫واﻟﻤﺘﻮﺳﻄﺔ ورﺟﺎل اﻷﻋﻤﺎل‬
27
iii. Low savings ratio

Currently, the Saudi household savings rate is very low, standing at ~2.4% of annual disposable
income. The rate is significantly below the 10% global standard, recognized as the minimum
level to ensure long-term financial independence.
Household saving rate across key economies (2014)1

% of household disposable income 39
( Chart Nº 4 )
23
19
Household saving ratio for
Saudi nationals is only 2.4%
16
9 9 10
6 6 7
4 5
3
2.4
Italy Canada USA Netherlands KSA Korea Noway Australia Germany Sweden Switzerland India China
1. All 2014 data, save for date on Saudi Arabia, are reported by OECD. KSA 6% rate is based on the most recent data from the General Authority
for Statistics (2013), where the total monthly income of household was SAR10723. Based on the same source, the rate for Saudi nationals
(excluding expatriates/residents) is only 2.4%, where the total monthly income for Saudi households were SAR 13610. As KSA data is based
on 2013, the baseline 6% figure may change due to oil volatility and other reasons. Figures include all figures of household expenditures,
including capital expenditures.
Beyond its negative effect on household long-term financial planning, a low savings rate typically
translates into lower levels of long-term deposits for the banking industry, decreased levels
of retail collective investment schemes managed by APs, as well as lower level of deposits
placed in savings-oriented insurance products (e.g., life / protection insurance scheme).
As an example, life / protection insurance today represents <0.1% of total GWP over GDP,
significantly below benchmarks found in Switzerland (5.5%) or the UK (8.7%). The current low
savings ratio hinders the development of the financial services sector overall.
Several root causes contribute to the above-mentioned challenges: a limited appetite for
private sector (especially banks) to promote interest-bearing savings, and limited availability of
incentives (e.g., tax breaks) that are typically leveraged to incentivize savings. Therefore, the
existing savings market is underdeveloped and has not yet matured.
iv. Evolving infrastructure for digitization
Similar to most other sectors, financial services is rapidly changing toward a higher level
of digitization. While Saudi Arabia has invested heavily in various components of technical
infrastructure (e.g., payments infrastructure), significant improvement is still possible in the use
‫اﻟﻤﻤﻠﻜﺔ‬society.
of this infrastructure toward a cashless ‫ﺳﺎﺋﺪ ﻓﻲ‬ ‫اﻟﻨﻘﺪي‬share
In 2016, ‫اﻟﺪﻓﻊ‬
of non-cash transactions stood
at 18% of total transactions.
Direct payments as share of total payments for the year of (2016)
In terms of value, % In terms of Volume, %
Indonesia 70 97
KSA 65 91
Malaysia 63 84
Turkey 63 69
China 51 69
USA 37 46
Singapore 30 38
UK 24 26
Direct payments as share of total payments for the year of (2016)
In terms of value, % In terms of Volume, %
22 12
16 3
15 3
12 2
12 1
9 <1%
8 <1%
1 <1%
Euro monitor 2016 : ‫اﻟﻤﺼﺪر‬

Canada
India
29
These countries lead global Fintech Hub rankings.
Rank Fintech Hub Score (Max 10)
1 Singapore 10
2 Zurich 9
3 Hong Kong 9
4 Hong Kong 9
5 Toronto 9
6 London 9
7 New York City 9
8 San Francisco 8
26 Mumbai 3
‫اﻷﻃﺮاف اﻟﻤﺒﺘﻜﺮة‬ ‫ﻏﻴﺎب إﻃﺎر اﻟﻌﻤﻞ اﻟﻼزم ﻹﺷﺮاك‬

KSA not present in the list
Leading Banking Regulators allow non-banking licences for Fintech companies
Country PSP licence E-money licence
KSA
Singapore
Hongkong
UK
Switzerland
USA
Canada
India
These countries lead global Fintech Hub rankings.
Rank Fintech Hub Score (Max 10)

v. Challenges in financial literacy
Financial literacy is low in comparison to similar countries. Only 30% of adults are considered
financially literate.
Financial literacy rate, as % of total adult based on World Bank survey results. %
Financial literacy is low in comparison to similar countries
( Chart Nº 5 )
80
71 71
66 66 67
64
61
60 52
42
40 35 36
31
25 27 27
24
20
0
Malaysia
South
Africa
France
New
Zealand
Australia
Netherlands
Germany
UK
Norway
Sweden
Turkey
Philippines
Egypt
Iraq
KSA
Brazil
B) Current Efforts
In designing the program, we have reviewed existing strategies and initiatives defined by
the contributing entities of the program. Currently, there are 297 initiatives planned or under
implementation, including:
• 143 initiatives planned or under implementation defined across 4 strategic programs of
SAMA:
o Banking vision
o Insurance vision
o Integrated payments strategy
o National savings strategy
• 108 initiatives planned or under implementation defined by CMA strategy,
• 22 initiatives planned or under implementation defined by Ministry of Finance’s Strategic
Plan,
• 17 initiatives planned or under implementation defined by SME Authority’s SME Financing
Strategy, and
• 7 initiatives planned or under implementation defined by Ministry of Economy and Planning
study on unlocking credit for private sector.
We have reviewed the impact and ease of implementation of these initiatives, to define the
program’s portfolio of initatives.
31
Chapter 4
33
Program Strategy
A) Strategic Pillars
B) Strategic Considerations
C) Tradeoffs and interdependencies with other VRPs

4. Program Strategy
This section summarizes the program’s execution strategy, and how the aspirations and
commitments will be realized. This section comprises strategic pillars, strategic considerations,
as well as expected trade-offs at the Program level.
A) Strategic Pillars
Vision 2030 objectives require

( Table Nº 10 )
1 2 3
Enable financial institutions Ensure the formation of an Promote and enable
to support private sector advanced capital market financial planning
growth
Pillar Target
Enhancing depth and breadth of financial services
and products offered
Enable financial institutions to support private sector Building an innovative financial infrastructure
growth
Managing risks through a thriving insurance sector
Enhancing capabilities of the talent force
Facilitating raising capital by government and private
sector
Offering an efficient platform to encourage investment
and diversify the investor base
Ensure the formation of an advanced capital market
Providing a safe and transparent infrastructure
(maintaining financial markets stability)
Enhancing market participants capacity and
sophistication
Stimulate and bolster sustainable demand for savings
schemes
Drive expansion of savings products and channels
Promote and enable financial planning available in the market
Improve and strengthen savings ecosystem
Enhance financial literacy
35
I. Enable financial institution to support private sector growth
1. Enhancing depth and breadth of financial services and products offered

The program will promote a diverse and inclusive sector that drives innovation and serves
the financing needs of a broader population. In doing so, it will open the sector to emerging
FinTech players, remove obstacles that hinder growth of finance companies, unlock financing
for SMEs, and increase mortgage penetration. Further, the program will improve access to
financing and enhance product offerings to better serve the needs of economic sectors.
2. Building an innovative financial infrastructure

The program will promote innovation through implementation of the Integrated Digital Payment
Strategy to move toward a cashless society, through digitizing KYC and end-to-end digital
processing at KSA banks, as well as through the development of the national online factoring
platform to enhance cash management for SMEs. The enhanced infrastructure will make
available banking solutions to a larger population, while also improving customer experience
through better technical standards.
3. Managing risks through a thriving insurance sector

The program will develop a sustainable and thriving insurance sector in Saudi Arabia. In so
doing, it focuses on enhancing the existing regulatory environment to drive consolidation and
strengthen balance sheet capacity. Emphasis on enforcing insurance regulations will also
ensure further development and market growth.
4. Enhancing capabilities of the talent force

The program will also enhance the professional and technical capabilities of existing talent by
preparing them to become high quality industry professionals with the capacity for facilitating
innovation in financial services. This will be done by establishing a Financial Sector Academy
covering all sub-sectors of financial services.
II. Ensure the formation of advance capital market
1. Facilitating raising capital by government and private sector

The program aims to diversify sources of funding for government and private sector by further
growing and deepening liquidity of the equity and debt capital markets. In doing so, the program
will encourage the planned privatization of state-owned entities to be performed through IPOs
on the Saudi Stock Exchange. This action will increase equity market capitalization and further
diversify investment options available for investors.
At the same time, the program will seek to further deepen the debt capital markets in Saudi
Arabia to provide alternative funding away from banking and equity.
Additionally, to further diversify alternative sources of available funding, especially for specific
economic segments (e.g., start-ups, entrepreneurs, NGOs), the program will emphasize the
growth of private equity, venture capital, financing investment funds, and endowments.
2. Offering an efficient platform to encourage investment and diversify the investor base
Beyond simply increasing the liquidity available on equity and debt capital markets, the
program will further develop investment and trading strategies available to investors through
the introduction of derivatives. It is believed that this action will further attract institutional
investors, diversifying away from today’s retail-driven market.
Furthermore, the program will seek to attract foreign investors to bring capital into the economy,
as it continues to diversify the investor base. It will do so by enhancing Qualified Foreign
Investor access and the account opening process. Concurrently, the program will establish co-
trading linkage with selected developed markets to provide remote access to Saudi markets,
thereby attracting further foreign liquidity into the Kingdom.
Moreover, the program aims to establish the necessary environment to grow the asset
management industry by further enhancing the capabilities of current players and attracting
new players, where necessary.
3. Providing a safe and transparent infrastructure (maintaining financial markets

stability)
While developing aforementioned key initiatives, the program will put strong emphasis on
ensuring stability, security and transparency of its infrastructure to bolster investor / issuer
confidence. In so doing, the program will seek to further digitize the process to enhance
investor experience. It will also strengthen cybersecurity to secure the stability and safety of
the infrastructure. Finally, to upgrade its post-trade model and risk management model, the
program will focus on the establishment of a clearing house based on CCP principles.
4. Enhancing market participants capacity and sophistication

Enhancing capabilities and sophistication of market participants (e.g., investors, financial
intermediaries) is often cited as key area of focus to further develop Financial Services in
Saudi Arabia. As shown by Financial Literacy rate, Saudi Arabia has only <30% of adults
that can be considered literate, the lowest in the Gulf region. As such, the program will focus
on enhancing local capacity, sophistication and capabilities by establishing a financial sector
academy covering all sub-sectors to upgrade local skills and capabilities. In addition, the
potential establishment of a regulatory entity to supervise the audit offices of listed companies
will be assessed to ensure compliance with highest standards of disclosures and transparency.
To promote and enable financial planning (retirement, savings, etc.), the program has four
37
key objectives which have been outlined and further detailed as part of the National Savings
Strategy, led by the National Savings Committee. The project includes extensive stakeholder
engagement and collaboration with GOSI, PPA, SDB, Ministry of Housing, Ministry of Education,
SAMA and CMA to outline the National Savings Strategy.
III. Promote and enable financial planning
1. Stimulate and bolster sustainable demand for savings schemes

The program will seek at promoting and enabling individuals’ long term financial planning
and financial independence, which are core objectives of Vision 2030. Given the limited
appetite today from private sector (e.g., banks) to promote interest-bearing savings accounts,
the program will seek the establishment of a National Savings Entity, a standalone entity
distributing government-backed retail savings products (e.g., savings Sukuks) to ignite and
bolster competition for savings deposits with private sector.
The program recognizes the importance of changing social attitudes toward savings to
achieve Vision 2030 objectives. In this regard, a Kingdom-wide financial literacy program will
be implemented encouraging both current and future generations to save more.
2. Drive expansion of savings products and channels available in the market

The program will encourage the development of tailored government-backed savings products
to spearhead efforts in motivating long-term savings. Tailored products geared around key
basic needs (e.g., home ownership, retirement, education) will be developed and distributed
to drive long-term savings, and savings incentives for a low income demographic will also be
developed to ensure inclusiveness.
Ensuring broad, fair and equal access to these products is cornerstone to the program. As
such, the program will seek removal of existing distribution constraints hindering access in
remote areas or for access to certain products. For example, the program will encourage the
distribution of certain collective investment schemes through non-AP entities and simplify
access to banking savings products (e.g., bancassurance)
3. Improve and strengthen savings ecosystem

Prodding the increase of private sector involvement in driving long-term savings is critical to
the program. In this way, the program will seek to introduce incentives for banks to attract
long-term deposits by providing advantage to deposits placed in longer term deposits and
savings accounts.
4. Enhance financial literacy

Given the low level of financial literacy in the Kingdom and limited uncoordinated initiatives
to drive financial education, the program will encourage the establishment of a dedicated
“Financial Literacy Entity” to coordinate and synchronize efforts revolving around financial
education to ensure quality and consistency of materials and messages, as well as reach and
scale.
B) Strategic Considerations
The program has taken some decisions with regard to strategic consideration within the time
frame based on the following analysis:
( Table Nº 11 )
Topic Description Decision taken & consequences

Financial stability We considered various The program carefully considered the financial
scenarios to achieve growth stability implications of the level of growth to
while maintaining overall target in the banking sector. The global financial
stability of the sector crisis and past crises in developing nations
show that inability to balance banking growth
with stability will impose significant downside
risks to economy in the medium to long-term. As
such, the program will comply with international
standards of stability to monitor and maintain
the health of the sector. In order not to risk
the achievement of Vision 2030 targets, the
program will diversify the sources of funding
by deepening the debt and equity capital
markets. In addition, the program supports
the independence of the regulatory bodies in
conducting their supervisory role of the sector.
Introduction of The program considered the One of the main objectives of the program is to
sophisticated capital right time for introducing diversify the asset classes available for investors
market products sophisticated capital markets in the capital markets. However, currently retail
products (i.e., derivatives) investors heavily contribute to trading in the
market and institutional capabilities are yet to
be built. As such, the program decided that
derivatives should be introduced in a gradual
manner starting with simpler instruments and
after the setup of relevant risk management
infrastructure (i.e., central counterparty) and the
financial sector academy, which can provide
necessary training for the market participants.
Meanwhile, the program is supportive of the
current ETF program in place at Tadawul to
diversify the asset classes.
39
( Table Nº 12 )
Topic Description Decision taken & consequences
Government backing for The program considered Given the limited appetite of private sector
savings products the competition with private to promote long-term savings, it is believed
sector for savings. that government should spearhead and drive
The program also carefully promotion of long-term savings to ignite and
considered potential bolster competition for retail savings. This has
government outlays to fund been observed in multiple successful benchmark
potential incentives linked to examples (e.g., National Savings & Investments
tailored government backed in UK). Yet, while tailored products will be
products designed and developed by relevant government
entities (e.g., Ministry of Education, Housing),
the program will also enable private sector
entities (e.g., banks) to distribute these products.
Additionally, competition will be circumscribed
solely to long-term savings.
Given limited availability of incentives (e.g., tax
breaks) in Saudi Arabia, effective government
incentives such as matching contributions have
been considered to incentivize savings in tailored
products. These incentives have been modeled
and structured to become fully self-funding in
the medium term (10-8 years).
Islamic Finance focus The program considered two Enhancing the Islamic finance offerings in the
options to define the right Kingdom is among the key objectives of the
focus to further enhance the program. The program considered two options
Islamic finance offerings in to achieve this goal: an explicit initiative focusing
the Kingdom solely on Islamic finance vs. relevant initiatives
focusing on enhancing right Shari’ah compliant
products within their domain. The program
decided to go with the second option. Initiatives
focusing on enhancing the current product
offering (e.g., debt capital markets, savings
products) will define right mechanisms to provide
the necessary Shari’ah compliant offerings. This
will enable the correct specialization within each
domain and avoid overlap/ cannibalization with
conventional products that will be offered.
C) Trade-offs and Interdependencies with other VRPs
The financial sector development program team has defined potential trade-offs and
interdependencies with other VRPs in order to obtain the leadership’s guidance toward
resolving them. These trade-offs and interdependencies are detailed as follows:
( Table Nº 13 )
Interdependencies Relevant programs Strategic decisions

Labor upskilling SCEP SCEP is involved in ensuring continuous
education of the Saudi population and in
developing talent in priority fields to align
education output and labor market. FSDP is
dependent on SCEP in addressing financial
literacy at schools
and training needed talent for the financial sector
through education
SME empowerment NTP, Housing, NIDLP Various programs depend on empowering
SMEs. By providing access to financing,
FSDP enables the empowerment of the SME
sector. Meanwhile, FSDP depends on the SME
Authority for improving the supply and nurturing
of creditworthy SME businesses.
Business environment PIF, SPP, Privatization, FSDP will improve access to financing and
development National Companies, Housing diversify funding opportunities for the private
and NIDLP sector. Several programs will benefit from these
activities.
Capital market PIF, SP, Privatization, National Development of an advanced capital market will
development Companies, Housing and enable various programs to achieve their funding
NIDLP and financial enablement objectives with more
diversified funding instruments.
( Table Nº 14 )
Trade-offs Relevant programs Strategic decisions

Financial planning and NTP Increased focus on savings might negatively
focus on savings impact economic growth in the short-term as
citizens divert away from consumption. However,
long-term, the impact will stabilize and will
support productive growth.
41
Chapter 5
43
Initiatives Portfolio
A) Initiatives Portfolio
B) Detailing Game-Changers
A) Initiatives Portfolio
The Program’s aspirations, commitments, strategic pillars and strategic considerations have
been translated into a number of initiatives to help achieve commitments made by the program.
These initiatives also constitute a foundation on which the aspirations of KSA Vision 2030 shall
be achieved.
The current relevant initiatives to the program and commitments by various entities have been
reviewed and linked to the strategic pillars.
Additionally, initiatives were designed according to a comprehensive review of the Program’s

requirements, and a thorough review of global best practices. The most suitable alternative
was selected to make up a portfolio of initiatives, which are detailed below.
Pillar 1: Enable financial institutions to support the growth of the private sector
( Table Nº 15 )
Initiative name Description Leading Expected Program metrics impacted by

entity impact initiative
Open Financial Enable market entry SAMA Increase 1) Share of non-cash transactions
Services to new of new types of number of 2) Number of Fintech players
types of players players (e.g., Fintech, licensed 3) Satisfaction index of Fintech with
telcos) to foster Fintech players KSA Fintech ecosystem
development of an to minimum of 4) Financial sector assets to GDP
innovative ecosystem 3 by 2020 5) Credit to Private Sector
in Financial
Services, encourage
entrepreneurship
/ job creation and
bolster private sector
competition to drive
innovation and
service quality
Create a level Address key SAMA Increase 1) Financial sector assets to GDP
playing field challenges for share of SME 2) Credit to Private Sector
for finance finance companies financing 3) ROA for financing company
companies (e.g., access to sector
funding, taxation) 4) NPL in financing company sector
to strengthen
competition with
banks
45
( Table Nº 16 )

Incentivize Nudge private SAMA SME loans 1) SME loans as % of bank loans
financial sector sector (e.g., banks) as % of bank 2) ROA for banking sector
to finance SMEs to increase share loans: 5% by 3) NPL in banking sector
of lending to SMEs 2020 4) Financial sector assets to GDP
by first improving 5) Credit to Private Sector
existing ecosystem
(e.g., restructuring
of Kafalah program,
enablement of
Bayan and SIMAH
to collect SME data)
and then potentially
considering incentives
for SME lending
Accelerate Implement mortgage SRC Increase share 1) Financial sector assets to GDP
launch of refinancing by SRC of credit to 2) Credit to Private Sector
mortgage (incl., product design) private sector
refinancing in GDP driven
products by mortgage
growth
Design and Introduce mortgage REDF Increase share 1) Financial sector assets to GDP
launch mortgage guarantee products of credit to 2) Credit to Private Sector
guarantee currently not available private sector
products in the market to in GDP driven
provide access to by mortgage
mortgage financing, growth
esp., for mid- to low-
income segments
Improve Strengthen mortgage SAMA Increase share 1) Financial sector assets to GDP
mortgage registration and of credit to 2) Credit to Private Sector
registration and enforcement practices private sector
enforcement to drive growth of in GDP driven
practices mortgage portfolio by mortgage
by further protecting growth
rights of the lenders
Establish Develop regulatory SAMA Increase 1) Financial sector assets to GDP
infrastructure for and legal frameworks contribution 2) Credit to Private Sector
micro-finance for micro-finance and of micro
and micro- micro-insurance companies
insurance and financing
to low income
segments
Review / Adjust existing SAMA Increase 1) Financial sector assets to GDP
introduce insurance regulations protection level 2) Credit to Private Sector
insurance to link with the of individuals
requirements mortgage law acquiring
linked to property and
mortgage law lenders with
property as
collateral
( Table Nº 17 )

Drive toward Reduce use of cash SAMA Share of 1) Share of non-cash transactions
cashless society by implementing non-cash 2) Number of Fintech players
IDPS 2017 and transactions 3) Satisfaction index of Fintechs
introducing additional as % of total with the KSA Fintech ecosystem
incentives to foster transactions:
use of cashless 28% by 2020
payment solutions
by merchants and
consumers
Digitize KYC Revise existing SAMA 1) Simplify 1) # of adults with a bank account
process and regulations to allow and increase 2) Number of Fintech players
facilitate end- digital customer access to 3) Satisfaction index of Fintechs
to-end digital on-boarding, KYC, banking with the KSA Fintech ecosystem
processing and end-to-end products
processing (e.g., 2) Enhance
e-signatures, efficiency
fingerprints) of banking
operations
Build a national Developing a SAMA Growth of SME 1) Financial sector assets to GDP
online factoring factoring platform sector in the 2) Credit to Private Sector
platform on top of the newly- economy 3) SME loans as % of bank loans
developed SADAD
e-invoicing platform
Strengthen Ensure enforcement SAMA 1) Additional 1) Total GWP / GDP non-oil
compulsory of mandatory motor GWP to non-oil 2) Coverage ratio of insurance
insurance and health insurance GDP: 2.9% by schemes
enforcement to limit fraudulent 2020 3) Solvency ratio
practices and further 2) % of insured
develop existing vehicles
insurance sector (mandatory
(e.g., additional GWP, motor): 75%
increased scale, by 2020
lower cost-to-income 3) % of insured
ratio) through tighter private sector
supervision employees
(mandatory
health): 45%
by 2020
Facilitate Enhance existing SAMA Consolidation 1) Capital adequacy ratio
insurance rules and of insurance 2) Total GWP / GDP non-oil
market M&A to regulations around market 3) Solvency ratio
increase scale M&A to facilitate resulting in
and solvency consolidation in the lower cost-
insurance sector by income,
clarifying / easing increased
process of winding up scale and
companies, resulting stronger
in better capitalized balance sheet
insurers with capacity capacity
and capability to
better serve market
needs
47
( Table Nº 18 )

Enhance Overhaul existing SAMA Clearer / more Coverage ratio of insurance
existing insurance regulations comprehensive schemes
insurance laws and revisit the insurance
and regulations allocation of laws and
responsibilities across regulations in
regulators to reduce line with global
existing overlaps standards
in mandates (e.g.,
SAMA, CCHI)
Develop a This initiative focuses MoF This initiative 1) NPL in banking sector
fiscal risk on developing a will result 2) Net stable funding ratio
management comprehensive in best 3) Capital adequacy ratio
framework framework for practices and
classifying, assessing, interactions
and monitoring fiscal in risk
risks to ensure a clear management
alignment between across the
the public sector and financial sector
financial sector
Set up a unit to The initiative focuses MoF This initiative Foreign investor ownership of the
promote one on establishing a will lead equity market
narrative to int’l coordinating entity to a better
audience to be the only source coordination
of information for while
government entities communicating
wishing to reach with int’l
international investors audience
or vice versa. As
international presence
/ participation in the
Kingdom increases,
there is a need
to align between
government entities
to ensure that there
is a single source of
information
Establish Institutionalize SAMA / Upskill 1) Financial sector assets to GDP
financial sector upskilling of existing CMA knowledge, 2) NPL in banking sector
academy capabilities / capabilities, 3) Credit to Private Sector
covering all sub- knowledge/ expertise expertise of 4) Number of Fintech players
sectors across all sub-sectors talent force
on the basis of the
existing Institute of
Finance
Pillar 2: Ensure the formation of an advanced capital market

( Table Nº 19 )

Privatize state- Encourage Min. of 1) Increase in 1) Share of ECM and DCM in the
owned entities privatization of Finance equity market financial sector
through IPO state-owned entities through cap.: To be 2) Total market capitalization
through IPO to Privatization estimated 3) Institutional investors’ share of
deepen equity market Supervisory working with value traded
in Saudi Arabia by Committees PSCs 4) Foreign investor ownership
increasing market (PSCs) 2) Increase in 5) Market concentration of top 10
cap., attracting institutional companies by market cap.
investments investors’
flows from foreign share of value
and institutional traded.: To
investors and be estimated
improving efficient working with
/ performance of PSCs
privatized entities 3) Increase
in foreign
investors to
be estimated
working with
PSCs
Deepen debt Encourage growth of CMA DCM 1) Total market capitalization
capital markets existing debt capital growth (total (shares and debt) as % of GDP
markets to further outstanding
diversify funding bonds and
options for public / Sukuks): 550B
private sector and SAR (2020)
create new asset
class for investors
Introduce Establishing a market CMA Increase in 1) Institutional investors’ share of
derivatives for offering and institutional value traded
trading of derivatives investors’
contracts share of value
traded
Establish co- Establishing Tadawul Increased 1) Foreign investor’s ownership of
trading / co- electronic linkage Foreign the equity market cap.
clearing linkage between Tadawul and Investor
with selected other exchanges Ownership
developed Enabling investors Reduced
markets from both exchanges settlement risks
to trade securities by maintaining
and clear settlements custody
in the other exchange through local
via local brokers licensed
custodian –
applicable
for remote
membership
model
49
( Table Nº 20 )

Support growth Broadening CMA 1) Increase 1) Financial sector assets to GDP
and expansion investment size and 2) Number of micro and small cap
of PE / VC funds available participation of companies listed as % of total
to sophisticated PE / VC funds number of companies listed
investors 2) Increase 3) Asset under Management as %
startup funding of GDP
/ seed funding
Enable growth Increasing amount CMA Increase size 1) Financial sector assets to GDP
and expansion of investment funds of investment 2) Asset under Management as %
of Financing available, adding funds of GDP
Investment more funding streams
Funds to the economy
Facilitate Building the CMA Increase Waqf 1) Financial sector assets to GDP
establishment infrastructure for funds offered 2) Asset under Management as %
and Endowment funds and managed of GDP
development by authorized
of Endowment financial
Funds institutions
Collaborate with Allocating part of CMA 1) Increase 1) Asset under Management as %
government government-managed Assets under of GDP
funds to assets to be managed Management
support asset by local authorized as % of GDP
management persons 2) Improved
and custody capabilities
activities of of financial
domestic APs intermediaries
Enhance QFI Providing quick and CMA 1) Reduce time 1) Foreign Investor Ownership of
access and direct access to the and improve equity market cap.
account opening Saudi Capital Market convenience 2) Institutional investors’ share of
process to for Qualified Foreign for QFI value traded
access the Investors account
market opening
process
2) Increase
Foreign
Investor
Ownership in
equity market
cap.
3) Increase
Foreign
Investor
contribution to
value traded
( Table Nº 21 )

Incentivize and Increasing the offering MEP 1) Increase 1) Share of ECM and DCM in the
encourage and listing of private (ownership equity market financial sector
private companies on the under cap. As % of 2) Total market capitalization
companies to stock market review) GDP (shares and debt) as % of GDP
offer and list 2) Increase free 3) Market concentration of top 10
their shares on float adjusted companies by market cap.
the stock market market cap. 4) Number of micro and small cap
companies listed, as % of total
number of companies listed
5) Min. free float of equity market
cap
Enable a digital Establishing a digital CMA 1) Increase 1) Share of investments accounts
process for KYC process and number of opened through eKYC
investment investment account investors in
account opening opening capital markets
2) Increase
ease of access
to Saudi
market
3) Increase fair
competition
among APs
especially the
local ones
Strengthen Improving the CMA 1) Decrease 1) Share of investment account
cybersecurity cybersecurity of number of opened through eKYC
capital markets cyber-attacks 2) Institutional investors’ share of
through information incidents value traded
exchange, monitoring, 2) Improve 3) Foreign Investor Ownership of
and applying Global the equity market cap.
international best Cybersecurity
practices Index score
Establish a Establishing a CMA 1) Increase 1) Institutional investors’ share of
clearing house clearing house post-trade value traded
based on CCP operating in line with revenue for 2) Foreign Investor Ownership of
principles CCP principles to Saudi Stock the equity market cap.
ensure introduction Exchange 3) Volatility of Saudi stock market
of adequate risk 2) Increase index (Average of -90days)
management operational
methods in line efficiency
with best-in- 3) Decrease
class international operational risk
standards 4) Facilitate
introduction of
dividends
Assess Enhance the quality CMA 1) Attract 1) Institutional investors’ share of
feasibility of of audit of public domestic value traded
establishing an companies, resulting and foreign 2) Foreign Investor Ownership of
independent in facilitating the investors equity market cap.
regulatory flow and quality 2) Increase
structure to of information to in local and
oversee public investors, so as to foreign investor
companies enhance transparency confidence
audits and reduce risk in 3) Improve
securities transactions governance
standards
51
( Table Nº 22 )
Pillar 3: Promote and enable financial planning (retirement, savings, etc.)

Establish Setup a standalone Min. of 1) Total amount 1) Financial sector assets to GDP
National government-backed Finance of savings held 2) Assets under Management as %
Savings Entity savings scheme (primary in NSE savings of GDP
(gov’t backed provider to stimulate owner) schemes: 6B 3) Net stable funding ratio
retail savings private savings by Min. of SAR by 2020 4) Capital adequacy ratio
products) providing tailored Economy 5) Total amount of savings held in
products, bolstering and savings products
competition for Planning 6) Number of available types of
savings and allowing (secondary savings products
retail customers to owner)
save in government
guaranteed products
without accessing
bond market directly
Develop tailored Provide local Ministry of 1) Increase 1) Financial assets to GDP
product: Home consumers with Housing in savings 2) Asset under Management as %
ownership tailored savings deposited of GDP
savings scheme scheme designed into savings 3) Total amount of savings held in
and targeted to home accounts from savings products
ownership scheme 1 to 2 billion 4) Number of available types of
SAR/year savings products
2) Number
of additional
available types
of savings
products: + 1
saving plan
( Table Nº 23 )

Develop tailored Provide local Ministry of 1) Increase 1) Financial sector assets to GDP
product: consumers with Education in savings 2) Asset under Management as %
Education tailored savings deposited into of GDP
savings scheme scheme designed and savings A/C: 3) Total amount of savings held in
targeted to higher 1.5 to 2 billion savings products
private education for SAR / year 4) Number of available types of
children 2) Number savings products
of additional
available types
of savings
products: + 1
saving plan
Distribute Extend reach and CMA Increase 1) Financial sector assets to GDP
certain collective increase penetration in savings 2) Total amount of savings held in
investment of collective deposited savings products
schemes investment schemes into collective 3) Asset under Management as %
through non-AP products by enabling investment of GDP
entities APs to leverage schemes
existing distribution products due
channels, including to ease of
banks, to reach end distribution
consumers constraints
Develop tailored Increase savings SDB 1) Increase 1) Financial sector assets to GDP
product for level of low income in savings 2) Asset under Management as %
low income segments by deposited into of GDP
segments designing, developing savings A/C: 3) Total amount of savings held in
and launching savings 1 to 2 billion savings products
products linked to SAR/year 4) Number of available types of
social lending 2) Number savings products
of additional
available types
of savings
products
Auto-enroll Nudge local MEP 1) Increase 1) Financial sector assets to GDP
Citizen Account consumers to save in savings 2) Asset under Management as %
holders in on a regular basis, deposited into of GDP
National Savings especially lower savings A/C: 3) Total amount of savings held in
Entity income segments, by 1 to 1.5 billion savings products
leveraging insights SAR/year 4) Net stable funding ratio
from behavioral 2) Increase
economics in number of
households
savings on
a regular
basis: 630K
/ year (%15
of current
households)
53

Simplify access Extend reach and SAMA 1) Increase 1) Financial sector assets to GDP
to banking distribution of in savings 2) Total amount of savings held in
savings financial services deposited savings products
products Develop the into banking 3) Net stable funding ratio
environment in which savings 4) # of adults with a bank account
alternative service products due 5) Total GWP / GDP non-oil
providers (e.g. to increased 6) Life GWP per capita
agents, microfinance reach in 7) Share of A/C opened through
institutions) can remote areas eKYC
emerge 2) Increase
in savings
deposited
into insurance
savings
products due
to enhanced
bancassurance
rules
Establish a Establish a SAMA 1) Overall 1) Financial sector assets to GDP
dedicated standalone entity level of adult 2) # of adults with a bank account
Financial responsible for financial 3) % of household saving on a
Literacy Entity coordinating and literacy in KSA: regular basis
driving financial %34 by 2020
education across 2) % of
KSA and all entities households
involved in financial saving on a
education to limit regular basis:
existing overlaps and %29 by 2020
maximize impact and
reach
Introduce Consider incentivizing SAMA Increase 1) Net stable funding ratio
incentives for banks through in savings 2) Capital adequacy ratio
banks to attract adjustments in deposited 3) Total amount of savings held in
long-term regulatory ratios to into banking savings products
deposits promote stable and savings
longer-term deposits products due
instead of current to increased
account deposits regulatory
requirement
needs for
private sector
B) Detailing Game Changers
Objective: Enable financial institutions to support private sector growth
Game-changer I: Open FS to new types of players
1. Description
This game-changer is owned by SAMA and focuses on opening financial services to non-
banking players with the objective of promoting innovation and competition in the financial
sector.
The game changer will consist of:
• Corporatizing GDPS/SADAD payment systems
• Establishing a Central Payments Unit at SAMA to regulate payments
• Developing new FS Payment Laws/ Regulations (e.g., payments, platforms)
• Creating and issuing new licenses to innovative non-banking players (e.g. payments,
platforms)
• Fast-tracking the SAMA regulatory sandbox approach
• Developing Fintech focused funds/ accelerators/ incubators to provide VC/ equity funding
and stimulate entrepreneurial environment
• Working with relevant government entities to attract FDI to the sector
2. Rationale
Opening financial services to non-banking players will have multiple benefits, among which
are:
• Supporting development of an innovation ecosystem in financial services
• Encouraging entrepreneurship & job creation in financial services
• Improving customer service quality by increasing competition
• Potentially strengthening lending capabilities for specific sectors
55
3. Estimated impact
This game-changer will have the following impact on the economy
• Increase the number of Fintech players:
o 2 tp 3 by 2020
• Establish Saudi Arabia as a strong Fintech hub and ensure a high satisfaction index of
Fintech players within the overall KSA Fintech ecosystem
A satisfaction index is a survey-based indicator assessing regulatory environment, access
to funding, government programs, taxation policies, availability of skillful workforce. The
first survey should be performed early 2019 for the GCC startups to understand the key
ecosystem attributes, that startups are looking for, when making a decision to enter a
country. These attributes should be used later for surveys across KSA fintech players, after
first players enter the KSA market (after 2020)
Game-changer II: Incentivize financial sector to finance SMEs
1. Description
This game-changer is owned by SAMA and focuses on introducing initiatives to incentivize the
financial services sector with the objective of increasing SMEs contribution to the economy.
• Improving the SMEs financing ecosystem by:
o Strengthening the legal framework (including collateral enforcement)
o Restructuring the Kafalah program
o Ensuring government commitment to allocate more contracts directly to SMEs
o Enabling Bayan and SIMAH to collect and update comprehensive SME data
o Establishing a local rating agency for SME credit assessment
o Providing alternative SME funding options (e.g. PE and VC vehicles)
o Developing a program to improve the financial literacy of SMEs
• Communicating lending targets to banks by 2020
o If SME lending from banks is below communicated target by 2020, SAMA will consider
incentives to encourage underperforming institutions
2. Rationale
Incentivizing the financial services sector to finance SMEs will result in multiple benefits to the
private sector, among which are:
• Increasing SMEs contribution to the economy and strengthening the private sector
• Increasing job creation and employment rate
• Addressing core bankability and SME growth issues
3. Estimated impact
Based on initiatives to be implemented and other benchmarked countries, this game-changer
will have the following impact on SME lending
• Increase SME loans as % of bank loans:
o 5% in 2020
• Value of SMEs funded through PE / VC vehicles
o 23B SAR in 2020
Game-changer III: Drive toward cashless society
1. Description
This game-changer is owned by SAMA and focuses on reducing cash in circulation by 2030.
• Implementing IDPS 2017, e.g.,
o Growing MADA infrastructure (PoS, cards in circulation)
o Expanding number of SADAD billers (incl. SME)
o Introducing SADAD e-invoicing
o Setting up P2P through SADAD and MADA
o Building real-time ACH
• Introducing additional incentives:
o Implementing an «Elevation program» to incentivize merchants and cardholders to grow
cashless payments
o Capping the value of customer cash transactions with corporate merchants
• Potentially considering additional measures (e.g., fees for cash withdrawals/ depositing) if
the above measures do not allow to reach the targets
2. Rationale
Reducing cash in circulation will have multiple benefits for the economy, among which are:
• Reducing cost of cash on economy
• Ensuring greater transparency for governments to monitor cash flows for taxation purposes
• Enabling better information to support SME financing and easier performance tracking
3. Estimated impact
This game-changer will have the following impact on the economy:
• Increasing the share of non-cash transactions (as % of total transactions):
o 28% in 2020
57
Game-changer IV: Enforce mandatory insurance
1. Description
This game-changer is owned by SAMA and focuses on enforcing mandatory motor insurance
for all vehicles, enforcing mandatory health insurance and eliminating fraudulent insurance
policies. To ensure a successful outcome, tighter supervision is required including alignment
with the Ministry of Interior and Ministry of Health as well as rewriting the insurance control
law. In addition, including insurance on government property and vehicles to create a new
mandatory insurance stream would encourage the rest of the country to follow.
2. Rationale
Enforcing mandatory insurance will result in multiple benefits to the private sector, among
which are:
• Strengthening private insurance sector through additional written premiums
• Protecting the society from free riders
• Protecting individual wealth
• Increasing the scale of insurers and improving the cost-to-income ratio
• Driving down the insurance costs by improving the scale of insurers
3. Estimated impact
Based on the initiatives to be implemented and standards of other countries, this game-
changer will have the following impact on the insurance industry
• Increase insurance penetration (GWP / non-oil GDP):
o 3.2% in 2020
• Coverage ratio of mandatory schemes
o Motor insurance
• 75% in 2020
o Health insurance
• 45% in 2020
Objective: Ensure the formation of an advanced capital market
Game-changer V: Privatize state-owned entities through IPOs
1. Description
This game-changer will be implemented by Ministry of Finance through Privatization Supervisory
Committees, and focuses on the privatization of state-owned entities primarily through the
issuances of IPOs, with the objective of increasing depth and breadth of the Saudi stock
market.

• Working with PIF, National Center for Privatization (NCP) and Privatization Supervisory
Committees (PSC) to select and define of a portfolio of state-owned entities to list primarily
on Tadawul to increase its market capitalization
Committees (PSC) to develop privatization timeline and roadmap
Committees (PSC) to define key regulatory framework changes necessary for entities to be
listed
Committees (PSC) to investigate development of adequate privatization model, taking into
consideration retail investors to generate buy-in from general public on agenda reforms
2. Rationale
Privatizing state-owned entities through IPOs will have multiple benefits to the Saudi capital
markets, among which are:
• Creating a unique opportunity to deepen and increase equity market in the Kingdom
• Increasing attraction of investments from foreign and institutional investors with a viable exit
opportunity
• Improving governance, performance and efficiency of privatized entities
3. Estimated impact
The program will work closely with privatization program and other related entities.
Game-changer VI: Deepen Debt Capital Markets
1. Description
This game-changer is owned by CMA, and focuses on deepening the debt capital markets of
KSA.
• Improvement of offering rules
• Issuances of Special Purpose Vehicle regulations
• Addressing of related Zakat and withholding tax obligations and calculations
• Reduction of single obligor limits
• Investigate enhancements to current Private Placement model (e.g., register with Tadawul
with minimal fee, relax capital requirements for institutional investors)
2. Rationale
Deepening debt capital markets will have multiple benefits to the Saudi capital markets, among
which are:
59
• Diversifying funding options for both public and private sectors

• Creating a new asset class for investors
• Diversifying the lending book and improving financial stability through reduction in single
obligor limits
• Provide family groups with reliable source of funding with limited disclosure requirements
3. Estimated impact
Based on preliminary plans, this game-changer will have the following impact on the Saudi
debt capital market:
• Increase existing debt capital markets (total outstanding bond and Sukuks) from 9% of GDP
(213B SAR) in 2016 to:
o >15% of GDP (>475B SAR )(2020)
Objective: Promote and enable financial planning (retirement, savings, etc.)
Game-changer VII: Establish National Savings Entity (Saving products supported by the
government)
1. Description
This game-changer is owned jointly by Ministry of Finance and Ministry of Economy and
Planning, and focuses on the establishment of a National Savings Entity (NSE) that will be
a stand-alone, government-backed retail savings scheme provider with the objective of
encouraging private savings in the Kingdom.
The game-changer will consist of:
• Designing and developing a portfolio of tailored retail savings schemes (e.g., retail savings
Sukuks) to be distributed via direct channels (e.g., online, phone) and also via banks
• Ministry of Finance savings schemes or approved savings schemes by Ministry of Finance
will be fully backed by Ministry of Finance guarantees
• Enabling retail customers to save in government guaranteed products (e.g., retail savings
Sukuks) without opening bond market directly to individuals
2. Rationale
Establishing the National Savings Entity will result in multiple benefits on financial planning in
Saudi Arabia, among which are:
• Creating a successful model in stimulating supply and creating demand
• Generating funding for financial services sector in Saudi Arabia
• Assuming responsibility from banks in offering savings products
• Distributing government-backed savings products to individuals both via banks and through
direct channels
3. Estimated impact
The game-changer is estimated to have the following impact on individual savings in Saudi
Arabia:
• Increase total amount of savings held in NSE savings schemes
o 6B SAR in 2020
• Diversify number of types of savings products available in the market
o 9 by 2020
Game-changer VIII: Establish Financial Literacy Entity
1. Description
This game-changer focuses on the establishment of a Financial Literacy Entity (FLE) that will
be a stand-alone, government entity with the objective of improving financial literacy and
awareness on the benefits of financial planning across the Kingdom.
The game-changer will consist of:
• Coordinating and driving financial education across Saudi Arabia and all entities involved in
financial education
• Developing financial literacy content
• Creating an entity funded by a levy charged on the financial services industry
2. Rationale
Establishing the Financial Literacy Entity will result in multiple benefits for financial planning in
Saudi Arabia, among which are:
• Limiting existing overlaps in financial literacy initiatives led by various financial literacy
providers in Saudi Arabia
• Ensuring consistency in quality, delivery and communication of messages to the general
public
• Maximizing impact through large scale, coordinated campaigns
3. Estimated impact
The game-changer is estimated to have the following impact on financial literacy in Saudi
Arabia:
• Increase the overall level of adult financial literacy in KSA:
o 34% of financial literate adults in 2020
• Increase the percentage of household saving on a regular basis:
o 29% of household saving on regular basis in 2020

61
Chapter 6
63
Enablers
A) Governance Model
B) Risk Mitigation and Required Actions

A) Governance Model
A. Proposed Implementation Management Model

The proposed implementation management model for the Financial Sector Development
Program will include the following elements:
• The Program Committee, comprising the following members:

- Ministry of Finance (Chairman)
- Public Investment Fund
- Saudi Arabian Monetary Agency
- Capital Market Authority
- Ministry of Commerce and Investment
- Ministry of Economy and Planning
• Communications Sub-committee:
- Representative of the Ministry of Finance
- Representative of the Saudi Arabian Monetary Agency
- Representative of the Capital Market Authority
- Representative of the National Savings Committee
- Representative of the Council of Economic & Development Affairs
The proposed implementation governance

The proposed implementation governance
Proposed implementation governance Key role and esponsibilities
Financial Sector Development National Savings • Meet quarterly
Invited Stakeholders Financial
Program Committee Committee Sector
• Monitor and report implementation
of program initiatives
Development
• Ministry of Finance (Chair) • Public Pension Authority Program • Monitor and report program metrics
• SAMA • GOSI Separate Committee • Resolve implementation issues – provided
• Ministry of Economy & Planning • Ministry of Housing Committee authority allows
• Capital Markets Authority • Ministry of Energy overseeing • Last escalation level
• Public Investment Fun • MLSD Pilar III • Day – to – day follow up
• Ministry of Commerce and Investment • Ministry of Education • Ongoing communication with relevant
• Social Development stakeholders
Program
• Track actively and report implementation
Management status of program initiatives
Office • Resolve implementation issues – provided
Sub-Committee on Media and authority allows
Program Management Office • Ad hoc support if needed
Communication
• Escalate if necessary
• Program manager (3FTEs) • Represent . From MoF Sub-Committee • Collect the input from the PMO on the status
- 1 FTE covering Pillar I • Represent . From SAMA on of the implementation
- 1 FTE covering Pillar II • Represent . From National Media and • Package the input into a communication /
Communication media messages
- 1 FTE covering Pillar III Savings Committee
• Represent . From CEDA • Lead and execute individual initiatives
Initiative owner
Initiative owner
Initiative owner
Initiative owner
Initiative owner
Initiative owner
Initiative owner
Initiative owner
Initiative owner
Initiative owner
Initiative owner
• Review of progress
Initiative • Day-to-day management of implementation
Owners teams
• Report implementation progress to PMO
• Flag / request issue resolution if needed
65
• Program Management Office, which includes:

- Program Manager
- Project Managers
- Owners of Financial Sector Development Program initiatives
Other stakeholders will be invited based on relation to the issues discussed, including
representatives from the private sector. In addition, the National Savings Committee will
continue to work closely with the Financial Sector Development Program Committee and
report progress in implementation as well as follow-up on implementation.
Proposed Roles and Responsibilities
The proposed roles and responsibilities of the components of the Management Model outlined
above will include:
• Financial Sector Development Program Committee:

o Meet at least quarterly
o Monitor and report on the implementation of program initiatives
o Monitor and report on program indicators
o Resolve implementation issues escalated by relevant entities
o Final esclation point
• Program Management Office (PMO):

o Follow-up on implementation on a regular basis
o Continuously communicate with relevant entities
o Follow-up on the status and report on program initiatives
o Follow up and report on program indicators
o Resolve implementation issues escalated by relevant entities
o Provide necessary delivery support, if necessary
o Escalate issues, if necessary
• Communication Sub-committee:
o Collect input from the PMO on implementation status
o Create messages for external audiences and communication plans
• Owners of initiatives:
o Lead and implement individual initiatives
o Review progress
o Daily manage the implementation teams
o Report progress on implementation to the PMO
o Identify issues and escalate for resolution, if necessary
B) Risk Mitigation and Required Actions
The implementation and development of this program may be hindered by several internal or
external risks. A detailed list of the most critical risks have been identified; mitigation plans have
been developed to address these risks to continue with the timely implementation of the program.
( Table Nº 25 )
entity Timeframe
Risk Risk to implement
Key initiave responsible
name and Type of risk mitigation these
for the
description measure measures
measures
Open Financial Limited Program- Develop Fintech Fund of Funds Upon approval
Services to new availability of specific focused funds/ of Game-
types of players equity / seed accelerators/ Changer “Open
funding for incubators to FS to new types
Fintech start- enhance funding of players”
ups for Fintech
companies
Lack of qualified Program- Financial Sector Financial Sector Upon approval
professionals specific Academy Academy of initiative
in the Fintech to develop “Establish
ecosystem dedicated Financial Sector
development/ Academy across
educational/ all sub-sectors”
training
programs
for Fintech
companies
Customer Program- Develop SAMA Upon approval
protection risk specific consumer of Game-
protection Changer “Open
framework as FS to new types
part of new of players”
Regulations
Incentivize Low demand for General Government Ministry of Mitigation action
financial sector SME financing allocating Finance can be started
to finance SMEs more contracts as soon as
directly to possible
SMEs and
implementation
of wider
initiatives by
SME authority
Drive toward Delays in Program- Introduce SAMA Upon approval
cashless society improvement specific additional of Game-
of financial initiatives in a Changer
inclusion may phased manner, “Incentivize
delay achieving after financial fin. Sector to
cashless society inclusion index finance SMEs”
targets have reached
a certain value
(e.g., %85)
67
Enforce Delays in the Program- Ensure SAMA Upon approval

mandatory enforcement of specific coordination and of Game-
insurance new procedures commitment of Changer
that could involved entities “Incentivize
hinder growth of (e.g., Ministry of fin. Sector to
the sector and Interior) finance SMEs”
pose moral risk
toward law-
abiding citizens
Deepen debt Lack of investor General Implementation National Savings Upon launch of
capital markets appetite to of initiatives Entity / Debt National Savings
invest in debt related to management Entity / Retail
instruments increasing Office / CMA Savings Sukuks
private savings
(e.g., savings
sukuks, NSE)
and attracting
foreign investors
Limited appetite General Introduce CMA / SAMA Upon approval
by private sector private of Game-
to tap into DCM placement Changer
for funding model to “Deepen debt
incentivize capital markets”
private
companies to
use DCM and
reduce single
obligor limit to
diversify lending
books of banks
Setup a National Difficulty in Program- Ensure MOF / MEP Upon approval
Savings Entity obtaining specific alignment / buy- of Game-
required license in from senior Changer “Setup
to operate leadership / a National
stakeholders Savings Entity”
through
extensive
and focused
communication
Limited appetite General Launch large NSE – once Upon launch of
from consumers scale marketing setup National Savings
to products campaigns Entity
offered Amend product
structures,
where needed
Establish Limited Program- Design SAMA Upon approval
Financial alignment / specific governance of Game-
Literacy Entity coordination structure / Changer
across involved model to ensure “Establish
stakeholders stakeholders Financial
commitment Literacy Entity”
from
government and
private sector
References
1. World Bank Data (2014)

2. Saudi Arabian Monetary Authority
3. OECD data
4. Euro Data Monitor (2016)
5. Capital Market Authority
6. Capital IQ data
7. Thom son Reuters data
8. Ministry of Finance
9. Saudi Vision 2030
10. Analysis of the Financial Sector Development Program Task Force
69
71

FSDP Program Book

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

FSDP Program Book

Загружено:

Авторское право:

Доступные форматы

Financial Sector Development

Chapter 1: Financial Sector Development Program Scope 7

Chapter 4: Program Strategy 33

Chapter 5: Initiatives Portfolio 43

List of key abbreviations

MoH: Ministry of Housing

Financial Sector Development Program - Scope

B) Vision 2030 Objectives Directly related to the Financial Sector

C) Vision 2030 Objectives Indirectly related to the Financial Sector

1. Scope of Financial Sector Development Program

( Table Nº 1 ) Level 1 Level 2 Level 3

1 Strengthen Islamic values

5 Enhance government effectiveness Position KSA as a global logistic hub

Grow non-oil exports Create special zones for

Enable citizen responsibility Promote & enable ﬁnancial planning

Enable social contribution Encourage volunteering

Enable larger impact of

C) The FSDP also indirectly contributes to 19 other Vision 2030 objectives:

Financial Sector Development Program Aspirations

C) Financial Sector Development Program Metrics and Targets

2. Financial Sector Development Program Aspirations

1) Bank for International Settlements

Number of adults with a

C) Financial Sector Development Program Metrics and Targets

1) Establishing the level of ambition

• A top-down benchmarking methodology, which analyzes the historical relationship between

2) Contribution of the VRP to the macro-economic metrics

Macroeconomic indicators ( Table Nº 4 )

Metric name 2016 2018 2019 2020 Rationale

Metric name 2016 2018 2019 2020 Rationale

Metric name 2016 2018 2019 2020 Rationale

i. High dependence on bank financing

%490 • 80-90% of local bond

HKeX %47 %53

QSE %48 %52

% of value traded (2016) % of value traded (2016)

ii. Gaps in financial inclusion and productive financing

KSA behind peers in terms of the share account holders

Overall Female Income, bottom 40% Rural

KSA total SME Estimated KSA

Proportion (%) of SME lending in total commercial loans

Average SME in benchmarks is about 33%

iii. Low savings ratio

Household saving rate across key economies (2014)1

iv. Evolving infrastructure for digitization

In terms of value, % In terms of Volume, %

Direct payments as share of total payments for the year of (2016)

In terms of value, % In terms of Volume, %

Euro monitor 2016 : ‫اﻟﻤﺼﺪر‬

These countries lead global Fintech Hub rankings.

Rank Fintech Hub Score (Max 10)

7 New York City 9

‫اﻷﻃﺮاف اﻟﻤﺒﺘﻜﺮة‬ ‫ﻏﻴﺎب إﻃﺎر اﻟﻌﻤﻞ اﻟﻼزم ﻹﺷﺮاك‬

Leading Banking Regulators allow non-banking licences for Fintech companies

Country PSP licence E-money licence

These countries lead global Fintech Hub rankings.

Rank Fintech Hub Score (Max 10)

v. Challenges in financial literacy

C) Tradeoffs and interdependencies with other VRPs

Vision 2030 objectives require

I. Enable financial institution to support private sector growth

1. Enhancing depth and breadth of financial services and products offered

2. Building an innovative financial infrastructure

3. Managing risks through a thriving insurance sector