Local banks to help streamline ministry supply chain
The Saudi Ministry of Finance on Monday signed agreements with three local banks to finance the ministry’s supply chain, in collaboration with the National Debt Management Center (NDMC). The signing ceremony took place under the patronage of Abdul Aziz Al-Furaih, chairman of the Steering Committee in the Ministry of Finance, at the ministry’s headquarters in Riyadh. The agreements were signed by Fahad Al-Saif, CEO of NDMC; Rania Nashar, CEO of Samba Financial Group; Faisal Alsaqqaf, CEO of the National Commercial Bank; and David Dew, managing director of the Saudi British Bank.
Al-Furaih said the signing of the agreements comes within the framework of enabling financial institutions to support the growth of the private sector, which is one of the pillars of the Vision 2030 Financial Sector Development Program. The aim is to make the private sector a diversified and effective sector to support the development of the national economy.
“Given the changes in the global economy due to the COVID-19 pandemic, we have reconsidered many supply chains, and during this exceptional period, we have succeeded in creating our own effective and secure supply chains rather than importing them from abroad. Because many countries
depend on supply chains, it is important to develop this sector and continuously work toward achieving the necessary streamlining of its role in the development of many industrial, commercial and service sectors,” he said.
NDMC CEO Al-Saif said the agreements, aimed at improving the level of cash flow and liquidity in the financial sector, will be implemented in two phases. The first phase begins with the payment of dues to the clients of government agencies, after the NDMC and banks agreed on financial facilities through a quick payment system using “reverse factoring.” The second phase is more comprehensive as it includes the development of a fully integrated program between the Ministry of Finance and the participating financial institutions to automate all possible mechanisms/products to finance the supply chain.
Ahmed Al- Suwaiyan, deputy minister for technology and development at the Ministry of Finance, said the Ministry’s digital portal Etimad will contribute to the development of the integrated program with the financial institutions in the second phase.
Hamad Al-Kanhal, deputy minister for financial affairs and accounts, said the move will help organize and accelerate payment processes and enhance partnerships with commercial banks. The clients will be able to submit their approved invoices to the funded bank through Etimad, at which point the amounts due will be deposited in their accounts and the Ministry of Finance will pay the value to the bank in the agreed period without any additional costs.