Riyadh: The International Finance Corp (IFC) and three Saudi Arabian government funds will provide $400 million (Dh1.4 billion) in Islamic financing to help Saudi banks boost mortgage lending.
"Home financing in Saudi Arabia is a priority for the IFC," Walid Al Murshed, Saudi country manager for the IFC, said in an interview yesterday. "Less than 10 per cent of total consumer financing goes to mortgages."
Saudi Arabia may approve the country's first mortgage law by the end of the year. The law may spur a rise of as much as 50 per cent in demand for housing, Kuwait Financial Centre said in a report earlier this month.
Saudi British Bank, Saudi Arabia's third-largest bank by market value, will get $150 million as will Saudi Home Loans Co., an Arab National Bank venture with Kingdom Installment Co. and Dar Al Arkan Real Estate Development Co., before the end of the year.
A Saudi Investment Bank venture with Amlak Fin-ance PJSC, a UAE-based provider of residential mortgages, will get $100 million, Al Murshed said.
The IFC, the private-industry lending arm of the World Bank, the Public Investment Fund, the General Organisation for Social Investment and the Public Pension Agency will provide $100 million each in 12-year loans to the banks.