Regulatory Alerts2018-02-21
The Finance of MSMEs Based on Cash Flows Through Mada POS Terminals
The Saudi Central Bank has activated technical settings in its Terminal Management System (TMS) to enable operating banks to finance Micro, Small and Medium Enterprises (MSMEs) exclusively based on cash flows processed through Mada POS terminals. Banks must restrict this TMS feature to such financing contracts, exclude it from other commitments requiring multiple additional guarantees, and verify whether an enterprise already holds existing cash-flow-based financing before establishing a new POS agreement. This circular mandates compliance with these operational parameters to align banking practices with the Kingdom’s Vision 2030 objectives for MSME sector growth.
Share