Source Credit: Ashraq Al-Aawsat
Riyadh: Saudi banks’ lending to the private sector reached a historic peak in January 2025, highlighting efforts to expand the Kingdom’s non-oil economy under Vision 2030.
According to the Saudi Central Bank (SAMA), bank claims on the private sector grew by nearly 14% year-on-year, reaching SAR 2.89 trillion ($770.6 billion) compared to SAR 2.54 trillion ($676 billion) in January 2024. This includes loans, advances, and other credit facilities—key indicators of available credit in the financial system.
Bank lending accounted for approximately 96% of total claims, surging to SAR 2.79 trillion ($744 billion), a 13% annual increase. Meanwhile, deposit growth was slower, rising 9.2% to SAR 2.73 trillion ($728 billion).
Anton Lopatin, Senior Director at Fitch Ratings, noted that most Saudi private firms rely on bank loans for financing, as access to public bond or sukuk markets remains limited. Over the past five years, private sector financing has nearly doubled, signaling strong credit demand to support Saudi Arabia’s economic diversification.
Despite rapid credit expansion, Saudi Arabia’s economy remains less leveraged than other Gulf nations like the UAE, Qatar, and Kuwait, leaving room for further growth. Lopatin expects the non-oil sector to grow beyond 4% in 2025-2026.
SAMA’s report also highlighted challenges, including a negative net foreign asset position since July 2024. In January 2025, Saudi banks recorded a SAR 10.7 billion ($2.8 billion) deficit, compared to a SAR 70 billion ($18.6 billion) surplus a year earlier.
As part of Vision 2030, Saudi Arabia aims to boost SMEs’ contribution to GDP to 35%, increase private sector participation to 65%, and raise foreign direct investment (FDI) to 5.8% of GDP. The International Monetary Fund (IMF) projects private sector credit growth of 9.7% in 2025, slightly lower than 10.1% in 2024, while Saudi Arabia’s public debt-to-GDP ratio is expected to reach 30%.
