Ibrahim Almojel, CEO, Saudi Industrial Development Fund (SIDF) • Interview

SIDF has been supporting the Saudi manufacturing industry for 46 years by providing medium- and long-term financial loans, advisory solutions, and human capital development of the ecosystem.

How did you coordinate with other parts of the government on the pandemic response, and what role did SIDF play?

SIDF was established in 1974 with a capital of USD133 million, thus SIDF has been supporting the Saudi manufacturing industry for 46 years by providing medium- and long-term financial loans, advisory solutions, and human capital development of the ecosystem. Today, as a financial enabler of the industrial transformation, SIDF has expanded its bylaws to extend its support to several promising sectors, raising its capital to USD28 billion in 2019, which allowed the fund to provide new tailored packages of financial services that meet the needs of the private sector in the industry, mining, energy, and logistics sectors under the National Industrial Development and Logistics Program (NIDLP). SIDF is the financial enabler of NIDLP, which is one of the largest programs of Vision 2030, aiming to attract investment and transform the Kingdom into a leading industrial powerhouse and a global logistics hub. When the pandemic occurred, the government was quick to respond and took decisive safety measures. We see the commitment to human life today in the low infection and fatality rates. In terms of economic measures, the government also acted quickly and early by launching urgent financial stimulus packages to ensure companies sustainability through the crisis. In line with these efforts, SDIF proactively supported small, medium, and large companies and offered financial initiatives tailored to their specific needs during these difficult times. These efforts resulted in three urgent financial aid initiatives that exceeded USD1.3 billion; the aid was in the form of restructuring installments of 546 loans due in 2020 amounting to USD1 billion. The financial liquidity of the companies was augmented by credit instrument to finance the operating expenses of the companies, especially the ones impacted by the lockdown, out of which 86 companies have benefited from the initiative for a total amount of USD 127 million. Finally, launching an accelerated working capital loan amounting to

USD172 million directed to finance the raw material requirements of the companies involved in the medical sector to help in boosting the local medical content and kingdom’s pharmaceutical security.

Does your recent capital increase reflect a strategic reorientation in line with Vision 2030 goals?

That was exactly the point; pre-2015, our capital was USD11 billion, and in 2017 it increased to over USD17 billion, then two years later it raised to USD28 billion. The successive increases of capital show the government’s commitment to the sectors we serve. In order to transform the Kingdom and have a destination for our vision, SIDF had to change in three ways. We delivered and introduced new sectors in late 2019 and 2020, as we had focused mostly on manufacturing for more than 40 years. In 2019, we expanded our sector offerings to include the whole mining process, logistics, and renewables with project financing. We also introduced the working capital loan, which proved to be extremely useful in 2020.

SIDF recently completed a far-reaching digitalization drive for its internal processes. What did this achieve?

Our process had not changed significantly since the 1970s, so in 2019 we introduced a major overhaul. We rewrote the process, changed the organizational structure to align with that process, and built a new digital system. We also anticipated the need to embrace the idea of working anywhere and shifted to laptops. The process of digitalization took a long time, as our activities, such as project finance, do not look at the financials of a company but their business plans. Asking a private company to only communicate online a system is difficult, but it is essential if we are to address the need in the market. Now one can apply for and sign a loan an online system, even factory visits can be carried out through our app. This provides transparency on the challenges and issues we have with the process and address clients’ needs.✖