SABB Launches Shariah-Compliant Supply Chain Finance Tool in Saudi Arabia

Riyadh-based Saudi British Bank (SABB) has launched a Shariah-compliant supply chain finance tool. This roll out is in line with the Saudi Vision 2030 programme, which aims to enhance financing for small and medium-sized enterprises (SMEs).

Why it Matters?

This tool is noted as a system based around buyer risk, in which the seller takes on the cost of discounting. This allows suppliers to get funding based on the creditworthiness of their customers without having to use their own credit lines. Majed Najm, Deputy Managing Director of Corporate and Institutional Banking at SABB, noted that by classifying payables as commercial rather than financing items in their balance sheets, customers will be able to better manage their budgets.

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