Economic Brief – Financial Sector Development Program Update – August 2020

Among the ten delivery programs established in 2017 to realize Vision 2030, the Financial Sector Development Program (FSDP) has seen substantial progress despite the economic downturn stemming from the COVID-19 pandemic. FSDP has three main objectives: 1) enable financial institutions to support private sector growth through lending and strategic investment, 2) ensure the formation of an advanced capital market, and 3) promote financial planning. Progress on these fronts has been achieved through regulatory reforms in the financial services sector, as well as investments in growth areas like financial technology. This brief examines the progress of Saudi Arabia’s financial sector under Vision 2030 by assessing some of FSDP’s key 2020 goals under its first two objectives, including the increase of digital transactions and technology, and the facilitation of mortgage and small business lending, growth of foreign portfolio investment, and market capitalization of the Tadawul. As the Saudi economy recovers from a decline in oil revenues and a pandemic-induced recession, the financial sector will play a key role in supporting non-oil private sector growth.