The Social Development Bank is a government bank specializing in providing financing to male and female citizens, including skilled professionals, craftsmen, widows, divorcees, low-income families, those about to get married, and startups. It offers interest-free loans, non-financial services, and savings programs. Established in 1971, it was initially known as the "Credit Bank."
Its main headquarters is located in Riyadh City, and it is organizationally connected to the National Development Fund. The bank’s board of directors is chaired by the Minister of Human Resources and Social Development. It is the second-oldest financing institution in the Kingdom of Saudi Arabia, after the Agricultural Development Fund, which specializes in financing farmers and agricultural activities and was established in 1963.
Social Development Bank mandates
At its inception, the Social Development Bank's mandates were limited to social financing. In 2006, a royal decree approved a new system that expanded its activities to include professional financing alongside social financing. In 2016, with the Council of Ministers' approval, its name was changed to the "Social Development Bank."
The bank's financial services and savings programs primarily target low-income families, institutions, companies, startups, and entrepreneurs. It also offers non-financial services by providing solutions and promoting a culture of saving and financial literacy. Loans are granted by the bank if two conditions are met: the borrower must have a genuine need for the loan, and the loan should fulfill a social, professional, or economic purpose. Repayment is made in installments.
Categories targeted by the Social Development Bank
The Social Development Bank provides its social loans to five groups: low-income families, assisting them with living costs through the 'Family Loan'; young people preparing for marriage and earning less than SAR14,500 with the 'Marriage Loan'; those seeking to renovate and rebuild their homes, with 'Restoration Loan'; previous borrowers facing increased family responsibilities with 'Ahil Loan'; and the neediest widows and divorcees category with 'Kanaf Loan'. Additionally, the bank offers all borrowers the 'Zood Saving Product' to help them save monthly amounts covering their future short-term needs.
The Social Development Bank offers professional loans to individuals to fund their small businesses through 'Microfinance' for artisans and tradespeople, helping them practice their business and crafts independently. It also provides 'Nafath Loan', which targets those capable of working but unable to find jobs or those wishing to supplement their monthly incomes and who have specialized skills or trades.
Social Development Bank's financing for small startup projects and enterprises
For the financing of small startup projects and enterprises, the Social Development Bank offers twelve financing programs targeting: healthcare projects, business incubators and accelerators, emerging technology projects, local content development, industrial projects, localization initiatives for activities planned for Saudization in 2019, mobile vending carts, startup projects, projects for health institute graduates, graduates with teaching diplomas, and holders of health diplomas, invention projects, excellence projects, and a franchise program. Additionally, it provides "Daem" and "Sahim" loans for third-sector organizations, charitable institutions, and associations.
Government social financing is not exclusive to the Social Development Bank. Other developmental and financial funds also provide social financing, albeit less comprehensively and within specific frameworks. For instance, the Real Estate Development Fund offers housing loans to citizens. The Alimony Fund, established in 2017, helps cover the needs of families abandoned by their providers. The Cultural Development Fund, founded in 2021, funds Saudi talent.
A new financing path from the Social Development Bank
On June 29, 2022, the Social Development Bank launched a financing path for employees in the non-profit sector. This is done by accrediting their employers on the government entities portal at the bank, classifying them as eligible beneficiaries under automated and simplified procedures. The new path includes the bank's financial products, both social and productive, such as marriage, family, and restoration loans, as well as the opportunity to benefit from freelance and startup project products.
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