Saudi Arabia Extends Virus Loan Support for Small Businesses

(Bloomberg) -- Saudi Arabia extended a loan deferral program to help small businesses cope with the fallout of the coronavirus pandemic by three months to the end of September.

The so-called Deferred Payment Program has already impacted 167 billion riyals ($45 billion) of payments since it began in March 2020, the Saudi central bank said in a statement Tuesday.

The program been extended several times to help support economic growth and employment in the private sector, and “to maintain financial sector stability,” the central bank said.

Micro, small and medium-sized businesses benefiting from the program will be assessed to determine to what extent they’re still affected, it added.

What Bloomberg Intelligence says:

“If the deferral program had ended in June, we estimate it would have led to at least 1-2 percentage points increase in non-performing loans for Saudi banks. Extending the program another three months will give banks more time to restructure viable loans and for borrowers to improve cash flows as the economy recovers from the impact of the pandemic.”
-- Edmond Christou, a financials analyst

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