Housing Finance Development Corporation (HDFC) has been chosen by the International Finance Corporation to coach Saudi Arabia's first home loan company targeted at the middle and lower income population in the oil-rich emirate.
The new company, is a Shariat-compliant home loan company with the IFC partnering three Saudi Arabian companies in promoting it. IFC is the private sector arm of the World Bank. It has signed up with Arab National Bank, the Dar Al-Arkan Real Estate Development Company, and the Kingdom Installment Company.
HDFC has been brought into the picture by IFC. HDFC will provide training to the management of the new company in credit risk management, operations and management information systems.
The new company will be known as the Saudi Home Loan Company and IFC will hold a five per cent stake in it.
Youssef Al-Shelash, Chairman of Kingdom Installment Company, said in an IFC release "For the first time, Saudi consumers will be able to find the combined skills and expertise of a leading retail bank and a specialist, real estate finance company to structure and make affordable Shariah-compliant financing solutions for purchasing residential properties."
Michael Essex, IFC's director for the Middle East and North Africa, added, "The creation of the first specialised primary housing finance institution in Saudi Arabia will have a strong demonstration effect and will encourage replication by other private sector players in the country."