Saudi Arabia has approved the launch of Saudi Home Loans Company (SHL) to tap into a market where four out of five Saudis do not own a home, state news agency SPA said Saturday.
The Trade and Industry Ministry approved the launch of SHL, which will provide loans compliant with Islamic law, SPA said. The firm will have a capital of two billion riyals (Dh2.14bn).
Each of Arab National Bank and private housing finance firm Kingdom Installment Company hold 40 per cent in SHL, according to Arab National Bank. Property developer Dar Al Arkan holds a 15 per cent stake in SHL and the International Finance Corporation has the remaining five per cent.
Only 22 per cent of Saudis own their houses, SHL’s managing director Abdullatif Al Shelash said earlier this month. “The Kingdom will need some 4.5 million new housing units within the next five years to accommodate its growing population,” Al Shelash said. SHL will cater mainly for the middle and the poor segments of the Saudi population, he added.
Fuelled by record oil receipts, the Kingdom has witnessed a boom in construction and infrastructure projects but realtors say the deficit in housing especially for low-income households has not been reduced. They blame the absence of a mortgage law as the main obstacle to higher investment in housing projects for the poor. The Justice Ministry said earlier this year the mortgage law would soon be issued. (Reuters)