Saudi Arabia’s National Development Fund (NDF) plans to provide an extra $5.9bn to Saudi businesses on top of the $6.8 it usually disperses annually, according to reports, as the Kingdom looks to weather the economic headwinds created by the global Coronavirus pandemic and lower oil prices.
According to Bloomberg, the NDF will use some of its roughly $100 billion of capital to finance the additional loans, Stephen Groff, the NDF’s governor, said.
The NDF oversees the country’s Real Estate Development Fund, Saudi Industrial Development Fund and Agricultural Development Fund, among others. The government hopes to reduce overlap by putting the NDF in charge of them.
“We act in the sense of a holding company,” Groff said in February. “The idea is to transition this entity into a development finance entity with the capital base of these funds, utilise it better …. and add infrastructure [to the sector development list].”
“The calls for working capital loans, and other types of financing support, are definitely exceeding the average year,” Groff said in an interview with Bloomberg. “Whether the final amount of funding this year will be double what we normally do is still not yet clear, but it could be around that.”
NDF is also working with commercial lenders to help restructure loans to companies struggling with repayments, and said that by the end of this month, it will have “provided support to over 4,000 medium and small firms across industries such as aviation, transport and manufacturing.”
Groff is a former vice-president at the Asian Development Bank.
