Gulf Installments keen to seize Saudi opportunities

Gulf Installments Company (Gulf Installments) is to launch its office in Riyadh during the third quarter of this year. The announcement comes 5 months after it commenced operations from its Jeddah-based headquarters. Gulf Installments is a Saudi-based installment company focused on providing Shariah-compliant installment and leasing to businesses across a variety of sectors and assets. It has a full-fledged branch office in Jeddah. In addition to Riyadh, there are plans to serve small and medium enterprises (SMEs) in the Eastern Province. Gulf Installments expects to open a branch in Dammam during the second quarter of 2014. This expansion is in line with the company’s commitment to make its Shariah-compliant credit solutions available across the Kingdom to small and medium businesses that represent 90 percent of the Saudi business community. Gulf Installments was established in 2012 by Shuaa Capital following the success of Shuaa’s subsidiary Gulf Finance Corporation in the UAE, says a company press release. The company commenced its operations in January this year, and since then, Gulf Installments has already provided Shariah-compliant installment and leasing to more than 15 businesses where the average deal size is SR 2 million to 3 million. Central to the company’s growth has been the considerable increase in demand for equipment (financing) mainly in the manufacturing, construction and contracting sectors. Saudi economy is currently flush with oil revenues; the Kingdom has embarked upon a major economic diversification program which includes the construction of several new economic cities and the expansion of heavy industries such as aluminum smelting. Over the course of 2011, contracts awarded totaled SR 264 billion, a 140 percent year-on-year increase, driving a robust and higher-than-expected 11.6 percent real growth in the construction sector. Strong demand for residential accommodation and improved availability of bank credit also means that the private sector will create a growing source of demand for construction projects during 2013. It is therefore anticipated that this trend should continue in the short to medium term on the back of the government's vast infrastructure investment scheme. David Hunt, CEO of Gulf Installments, said: "We have already achieved more than 20 percent of our targets within the first quarter of the year serving the growth of the Saudi business community through a wide range of installment and leasing solutions." He added: "These solutions are in demand by a large number of clients, which paves the way for building significant market share." The CEO added: "Gulf Installments has had a successful launch here in Saudi Arabia and is currently providing Shariah-compliant installment and leasing to SMEs from across a variety of sectors, from contracting and construction to health care and education; whether they need to establish their business or expand it by purchasing assets such as heavy plant and machinery, medical equipment, or contracting and constructing equipment. " He said: "Our focus is on the SME community, which is central to Saudi Arabia’s economy, and we are committed to the Kingdom for the long term and expanding our reach across the Kingdom in record periods of time. Our installment and leasing deals are an investment in the success story of Saudi Arabia, and underscore our confidence in the growing private sector in the Kingdom." The CEO said: "There is a strong demand for our proposition as Gulf Installments is delivering Shariah-compliant installment and leasing solutions to the Saudi market. Our installment and leasing solutions offer an alternate source of funding to existing bank facilities, provide increased affordability and purchasing power, and allow our customers to enjoy long term stability for asset purchases. " Nair Al-Sulami, branch manager, Saudi Arabia for Gulf Installments, said: "We are very pleased with our progress and expansion thanks to the support of SHUAA and Gulf Finance, and the strategic alliances that we have formed with some of the top heavy equipment vendors in the Kingdom." But he added: "Mostly, our success in such a short period of time has been a result of bringing in the best team of talented experts with Saudi talent at the heart of that team." Al-Sulami also said: "We will continue to focus on hiring Saudi nationals, and transferring the know-how and sector expertise to them. They are the future of this country and nationalization has been one of our key drivers, strengths and priorities." The press release from Gulf Installments also said that Saudi Arabia is the largest economy in the GCC, with a nominal GDP of $ 435 billion, and is expected to grow by 4.5 percent in 2013. Even though Saudi SMEs account for 90 percent of Saudi businesses and 24.7 percent of total employment, they represent only 2 percent of the Saudi banks’ lending market. With over 220,000 SMEs in the Kingdom, many of which are underserved, credit demand outpaces supply. Source: ArabNews