Saudi pushes to get poor on property ladder

by Wael Mahdi Sunday, 09 December 2007

The World Bank and a group of Saudi Arabian companies on Saturday launched an Islamic mortgage lender in an effort to get more people on the property ladder.

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Saudi Home Loans Company (SAHL) will be based in Riyadh and provide home ownership for the country’s middle- and lower-income population, which is currently underserved in housing finance.
World Bank private sector arm the IFC has teamed up with Arab National Bank, Kingdom Installment Company (KIC) and Dar Al-Arkan Real Estate Development Company to set up the lender, which will have a start-up capital of two billion Saudi riyals ($536.2 million).

Arab National Bank and KIC are the two major stakeholders in SAHL, with 40% each, while Dar Al-Arkan has a 15% stake and IFC has provided investment of 100 million riyals for a 5% stake.

The kingdom’s booming economy has seen the cost of accommodation soar over the last few years, with house prices now too expensive for many Saudis.

Rents jumped 11% in September, contributing a rise in inflation of 4.8%, the highest level in at least a decade.



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