Shuaa starts new Saudi instalments company
Jeddah, February 3, 2013
Shuaa Capital has announced the establishment of Gulf Installments Company, a new Saudi-based company focused on providing installment and lease financing to businesses across a variety of sectors and assets.
It will be operated by Gulf Finance under a management contract with Shuaa, a statement from the company said.
Sheikh Maktoum Hasher Al Maktoum, executive chairman of Shuaa Capital and chairman of Gulf Finance, said: “We are excited about the establishment of Gulf Installments in Saudi Arabia. This is an important strategic milestone for our credit business that we announced in October 2012, and represents an enormous opportunity for SHUAA to build out a successful business in the largest regional economy.”
“Our investment in Gulf Installments is an investment in the success story of Saudi Arabia, and underscores our confidence in the growing private sector in the Kingdom.”
Saudi Arabia has one of the largest economies in the GCC, with a nominal GDP of $435 billion, and is expected to grow by 4.5 per cent in 2013. Even though Saudi SMEs account for 90 per cent of Saudi businesses and 24.7 per cent of total employment, they represent only 2 per cent of the Saudi banks’ lending market. With over 220,000 SMEs in the Kingdom, many of which are underserved, credit demand outpaces supply.
Dr Sabah al-Binali, chairman of Gulf Installments, and vice chairman of its operator Gulf Finance, said: “Our move into Saudi Arabia is a perfect opportunity to extend Shuaa’s reach into a new and dynamic market place. We have exceptional expertise within the SME space and through Gulf Installments, we are now able to offer the Saudi business community a wide range of credit solutions. These solutions are in demand by a large number of clients which paves the way for building significant market share.”
David Hunt has been appointed CEO of Gulf Installments in Saudi Arabia, the statement said. An experienced managing director with over 24 years financial services experience in emerging markets and extensive regional knowledge, Hunt is perfectly placed to lead the company’s operation as it expands into the Kingdom.
Prior to joining Gulf Installments, Hunt held various senior and director-level positions at the HSBC Group. He was managing director and chairman of the executive committee of SABB Takaful, a Saudi publicly quoted insurance company, and most recently head of regional insurance at HSBC Bank Middle East. He will lead a team of seasoned bankers, financial veterans and credit professionals, it said.
“Gulf Installments aims to finance SMEs across a variety of sectors, from contracting and construction, to healthcare and education; whether they need to establish their business or expand it by purchasing assets such as heavy plant and machinery, medical equipment, or contracting and constructing equipment,” Hunt said.
“There is a strong demand for our proposition as Gulf Installments will deliver Sharia-compliant financing solutions to the Saudi Arabian market. Our installment and lease financing solutions offer an alternate source of funding to existing bank facilities, provide increased affordability and purchasing power, and allow our customers to enjoy long term stability for asset purchases. Furthermore, they release working capital and improve cash flow for businesses.”
Gulf Installments offers lease financing for a wide range of fixed assets. Lease periods are available from one to four years and can be tailored to suit the needs of each individual client based on the term, down payment and rental plan.
Strategic alliances have already been negotiated with two of the top five heavy equipment vendors in the Kingdom, which will underpin the business and ensure immediate traction, the statement said. This in turn will capitalise on the significant growth within Saudi Arabia’s construction industry which awarded SR270 billion ($72 billion) of contracts in 2011 up 155 per cent on 2010.
Gulf Installments is based in Jeddah and will be expanding across the Kingdom over the course of the next few years. – TradeArabia News Service
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