Circular

Gentlemen,
Peace, mercy, and blessings of God be upon you.

Subject: Model Form of Individual Consumer Finance Contract.

Based on the authorities vested in the Saudi Central Bank under its system issued by Royal Decree No. (36/M) dated 11/4/1442H, the Banking Control System issued by Royal Decree No. (5/M) dated 22/2/1386H, and the Financing Companies Control System issued by Royal Decree No. (51/M) dated 13/8/1433H, and in light of the Saudi Central Bank's continuous efforts to protect customers of financial institutions, enhance fairness in transactions in the financial sector, reduce gaps of difference and disparity in consumer finance contracts between financing entities, as well as to limit disputes that may arise from these contracts.

You will find attached the Model Form of Individual Consumer Finance Contract, which all financing entities are required to comply with, and to complete the necessary procedures according to their adopted policies and procedures. The Model Form must be applied starting from 01/07/2023, and no contracts contrary to it shall be concluded or any amendments made to it starting from that date.

For information and action as of its date.

Al-Harir,
And accept my regards,

The Systems
Yazed bin Ahmed Al Sheikh
Deputy Governor for Supervision

Distribution Scope:

Banks and banks operating in the Kingdom.
(Local banks, branches of foreign banks, digital banks)
Financing companies operating in the Kingdom.

Contract No.: ...................

Model Form of Individual Consumer Finance Contract

Page No.	Content
3	Finance Contract Summary
4-5	Parties
5	Preamble
5	Article (1): Scope of the Contract
5-6	Article (2): Definitions and Interpretation
6-7	Article (3): Conclusion, Effectiveness, and Duration of the Contract
7	Article (4): Financed Asset
7	Article (5): Financial Obligations
7-8	Article (6): Installments
8	Article (7): Payment Methods
8-9	Article (8): Delay or Default in Payment
9	Article (9): Procedures for Exercising the Right to Terminate the Contract
9-10	Article (10): Early Settlement Provisions
10	Article (11): Costs and Administrative Fees
10	Article (12): Guarantees and Substitutes
10-11	Article (13): Commitments and Declarations of the Beneficiary
11	Article (14): Commitments and Declarations of the Financier
12	Article (15): Contract Breach Provisions
12	Article (16): Death or Disability of the Beneficiary
12	Article (17): Notarization of the Contract
13	Article (18): Amendment of the Contract
13	Article (19): Notifications
13-14	Article (20): Miscellaneous Provisions
14	Article (21): Applicable Law and Jurisdiction
15	Appendix No. (1) Installment Repayment Schedule

Finance Contract Summary

Beneficiary Data

Contract No.	Beneficiary Full Name
	National ID/Residence ID No.
Contract Date

Finance Data

Finance Format	Amount (SAR)	Details of Total Amount Payable
%		Finance Amount
		Total Finance Cost (+)
Number of Installments	%	Installment Cost Rate (Profit)
Monthly Installment Amount (SAR)		Installment Cost Amount (Profit)
First Installment Due Date		Administrative Fees Amount (excluding government taxes)*
Last Installment Due Date		Total Amount Payable (=)
		Additional Notes*

*The phrase "Not Applicable" shall be inserted if the relevant item does not apply to the contract.

Key Provisions of the Finance Contract

Article	Content
(4)	Financed Asset Data
(1)	Installment Repayment Schedule
(8)	Consequences of Delay in Installment Payment
(9)	Procedures for Terminating the Finance Contract
(10)	Early Settlement Provisions
(16)	Death or Disability of the Beneficiary

Notice: The finance contract and its appendices must be read and the terms and conditions fully understood. Reviewing this summary does not replace the contract, nor does it exempt the beneficiary from the obligations contained therein.

Beneficiary Signature (Acknowledgment and Receipt)¹ Authorized Signatory Signature for the Financier and Stamp

¹ Signature can be performed electronically via electronic blogs using digital certification.

Consumer Finance Contract

Contract No.
Contract Date

This contract was concluded in the city of 1200000000 on day 1200000000 dated 1200000000 AH corresponding to 1200000000 AD, between:

First: Party One:

Financier Name	(Referred to in this contract as Party One or the Financier)
Reference under	And subject to the supervision and oversight of the Saudi Central Bank,
Unified Non-Governmental Establishment Number
Commercial Registration Issue Date
Commercial Registration Issue Place
National Address
Contact Data for Notifications
Contact Data for Complaints and Objections
Represented by in Signature	/Mr.

Second: Party Two:

Beneficiary Full Name	(Referred to in this contract as Party Two or the Beneficiary)
Nationality
Date of Birth
ID Type
National ID/Residence ID No.
National ID/Residence ID Expiry Date
National Address
Contact Data for Notifications
Home Phone (if available):
Mobile:
Email (if available):

Third: Party Three (if applicable):

Guarantor Name
Guarantee Amount
Guarantee Contract No.
Nationality
Date of Birth
ID Type
National ID/Residence ID No.
National ID/Residence ID Expiry Date
National Address
Contact Data for Notifications
Home Phone (if available):
Mobile:
Email (if available):

The phrase "Not Applicable" shall be inserted if the relevant item does not apply to the contract.

Preamble

[The Preamble clause must be completed by the Financier to clarify the offer and acceptance for concluding the contract and to be consistent with its format.]

Article (1): Scope of the Contract

1.1 The Preamble mentioned above in this contract, the Finance Contract Summary, the Contract Appendix, and any data, terms, or declarations the Parties agree to attach to this contract constitute an integral part of the Contract.
1.2 Subject to the nature of the license and activities conducted by the Financier, the provisions of the Banking Control System and its rules, the Financing Companies Control System and its executive duties, and the instructions issued by the Saudi Central Bank shall apply to everything not stipulated in this Contract. In case of conflict between the Contract provisions and the provisions of the Systems and Instructions, the provisions of the Systems and Instructions shall prevail.

Article (2): Definitions and Interpretation

2.1 The following words and expressions – wherever they appear in this Contract – have the meanings indicated opposite each of them, unless the context requires otherwise:

Term	Meaning
Contract	Refers to this Consumer Contract, referred to as "the Contract," and includes the provisions, terms, exceptions, appendix, and guarantee documents (if any).
Parties	The Financier, the Beneficiary, and the Guarantor (if any).

Article (3): Conclusion, Effectiveness, and Duration of the Contract

3.1 The Contract enters into force and its duration begins from the date 1200000000 AH corresponding to 1200000000 AD, and continues.

Article (4): Financed Asset

[This Article must be completed by the Financier to clarify the data and specifications of the Financed Asset, and it must be in the form of a table specifying – at a minimum – the type of Financed Asset (e.g., real estate/metals/goods, etc.), its quantity, and the costs and fees of its purchase, the name of the selling merchant (if applicable), and any data or information that is or may be material regarding the Financed Asset, with clarification of the delivery clauses and the Financier's delivery/authorization/sale of the Financed Asset according to the finance format.]

Article (5): Financial Obligations

5.1 Finance Amount:
........................... Saudi Riyals.
5.2 Installment Cost (Profit):
The Installment Cost (Profit) is fixed for the duration of the Contract at a rate of 1200000000% of the Finance Amount, which equals 1200000000 Saudi Riyals.
5.3 Administrative Fees (excluding government taxes):
...........................
5.4 Annual Percentage Rate (APR):
1200000000%.
5.5 Total Amount Payable by the Beneficiary:
........................... Saudi Riyals.

Article (6): Installments

6.1 Each installment of the total amount payable by the Beneficiary is due on the day [within the date of the day] Gregorian or its equivalent in the Hijri calendar.
6.2 The installment data are as follows:
Installment Amount: ........................... Saudi Riyals.
First Installment Due Date: 1200000000 AH corresponding to 1200000000 AD.
Last Installment Due Date: 1200000000 AH corresponding to 1200000000 AD.
6.3 Appendix No. (1) of the Contract contains a full statement of the installments due from the Beneficiary.
The Beneficiary undertakes to pay the installments to the Financier regularly and on their agreed dates according to the installment repayment schedule contained in Appendix No. (1) of the Contract.

Article (7): Payment Methods

The Beneficiary undertakes to pay the installments to the Financier on their due dates via one or more of the following methods:

( ) Deposit, or cash payment, at one of the Financier's branches, or the branch specified by it.
( ) Via the Financier's dedicated electronic payment gateway.
( ) Via the Sadad system to account [.........].
( ) Authorization by the Beneficiary to the Financier for direct deduction from his account number [.........] at bank [.........] on the due date [.........].
( ) Authorization by the Beneficiary to the Financier for direct deduction from his account number [.........] at bank [.........] on the date of salary credit.
( ) Deposit into the Financier's account with the following details:

Bank
Account Name
Account Number (IBAN)

Article (8): Delay or Default in Payment

8.1 In the event the Beneficiary delays (7) working days from paying any due installment in full or in part on its due date, the Financier shall send a delay notification to any of the addresses listed in the Contact Data for Notifications specified in the Preamble of the Contract to the Beneficiary (and to the Guarantor, if any), indicating the Beneficiary's delay in payment and informing him of the requirement for immediate payment.
8.2 Subject to what was mentioned in Clause (6.5) and (8.1) of the Contract, the Beneficiary is considered in default if he delays in full or in part the payment of (5) consecutive or scattered installments, or if he delays in the payment of (3) consecutive or scattered installments on their due dates. At that point, the Financier has the right to consider the Beneficiary in default and shall send a default notification to the Beneficiary at the address specified in the Contact Data for Notifications in the Preamble of the Contract, granting him a payment period not exceeding (30) calendar days from the date of the notification.

Article (9): Procedures for Exercising the Right to Terminate the Contract

9.1 Subject to what is mentioned in Article (10) of the Contract, the Beneficiary may cancel the Contract by providing the Financier with a written notification (paper or electronic) to any of the addresses listed in the Contact Data for Notifications specified in the Preamble of the Contract to the Financier, to obtain confirmation of non-fulfillment of the conditions.
Stated in Clause (9.7) of this Article regarding the Beneficiary.
9.2 The Beneficiary does not have the right to exercise the right to terminate the Contract if any of the following conditions are met:
- 9.2.1 If the Beneficiary withdraws any part of the Finance Amount.
- 9.2.2 If the Beneficiary uses any means of obtaining the finance provided to him by the Financier to obtain goods or services, including depositing items into the Beneficiary's wallet, and the Beneficiary's ownership or use of the Financed Asset.
9.3 In the event of terminating the Contract under Clause (9.1) of this Article, the Financier is not allowed to impose any installment cost (profit) or fees, or demand any commissions from the Beneficiary.

Article (10): Early Settlement Provisions

10.1 The Beneficiary may request at any time the early submission of the amount mentioned below to enable him to settle early, as follows:
- a- The remaining balance of the Finance Amount.
- b- The reinvestment cost (profit), not exceeding the installment cost (profit) for the installments of the three months following the last installment due before the Beneficiary submits the early settlement request according to the installment schedule in Appendix No. (1).
- c- What the Financier pays to a third party due to the contract of non-refundable expenses that the Financier must prove.
10.3 The Beneficiary undertakes to pay the early settlement amount within (7) working days from the date of his notification thereof, and the Financier undertakes to issue a clearance letter to the Beneficiary and update his credit record with the Credit Bureau within the period specified by the relevant instructions and systems.

Article (11): Costs and Administrative Fees

11.1 The Beneficiary undertakes to pay the costs and administrative fees agreed upon in Article (5) of the Contract, provided that the total of these costs and administrative fees does not exceed the amount of (5,000) Riyals or (1%) of the Finance Amount, whichever is less, and this does not include government taxes.
11.2 The Financier bears the costs and fees stipulated in the Contract as his responsibility or stipulated by the relevant systems and instructions to be borne by him.

Article (12): Guarantees and Substitutes

12.1 The Beneficiary undertakes to provide the Financier with one or more of the following guarantees or substitutes:
- ( ) Guarantee (according to the model approved by the Financier).
- ( ) Number [......] Promissory Note.
- ( ) Salary transfer to the Financier.
- ( ) Standing Payment Order or Direct Debit.
- ( ) Others (if any), which are: .......................
12.2 The Beneficiary provides all guarantee documents (if any) to the Financier on the date specified in Article (3) of the Contract.

Article (13): Commitments and Declarations of the Beneficiary

13.1 The Beneficiary undertakes and declares that the information, documents, or papers he provided to the Financier for the purpose of conducting any searches or evaluations to enter into the Contract are true, correct, accurate, and not misleading.
13.2 The Beneficiary undertakes and declares – in the event the Contract is concluded via electronic channels using digital certification – that the Contract is signed electronically, and he is not allowed to challenge or object to the Contract or the validity of its conclusion. Based on the fact that its execution is electronic, the Beneficiary also declares his awareness of the risks associated with that.
13.3 The Beneficiary undertakes and declares that the obligations contained in the Contract are binding and enforceable obligations upon him, and he undertakes to comply with them. He also declares that the Financier's books and records are conclusive and final evidence of the correctness of the amounts accepted in the Financier's records, and are legal evidence relied upon at any time or in the event of a dispute between the Parties, unless the Beneficiary objects to them within (7) working days from the date of notification thereof in the Financier's records.

Article (14): Commitments and Declarations of the Financier

14.1 The Financier undertakes and declares that the obligations contained in the Contract are binding and enforceable obligations upon him, and he undertakes to comply with them.
14.2 The Financier undertakes and declares that he has not taken any action to declare his bankruptcy or insolvency, and no regulatory actions have been taken against him.
14.3 The Financier undertakes and declares that he – before concluding the Contract – has carefully and clearly studied the Beneficiary's credit status and the Beneficiary's ability to bear the obligations arising from this Contract.
14.4 The Financier confirms that he deals with fairness, honesty, and equity with the Beneficiary in all stages of their relationship, and the Financier's application of best practices to protect the Beneficiary's rights. The Financier also undertakes to apply the relevant systems and instructions regarding this Contract.
14.5 The Financier undertakes to protect the Beneficiary's financial and personal information and maintain its privacy, and not to use it except for specific and transparent purposes, except for what the Financier discloses to government institutions or licensed non-governmental entities to the extent necessary to fulfill his right according to the relevant systems and controls.
14.6 The aforementioned declarations and commitments remain valid throughout the duration of the Contract, and the Financier is not allowed to consider them limited to the time of signing the Contract.

Article (15): Contract Breach Provisions

15.1 The Beneficiary is considered in breach of his obligations under this Contract in any of the following cases (each of which is referred to as a "breach case"):
- 15.1.1 When the Beneficiary fails to pay the due installments and fails to rectify the default within the period granted in the default notification according to the delay or payment provisions in Article (8) of the Contract.
- 15.1.2 When the Beneficiary breaches the terms and conditions of the Contract in a fundamental manner, and fails to rectify such breach within the period stipulated in the Contract, or within (30) days from the date of the Financier's notification to the Beneficiary of such breach (in case no other period is stipulated in this Contract).
- 15.1.3 When it is proven that any commitments, declarations, or guarantees provided under this Contract are fundamentally untrue.
- 15.1.4 When the Beneficiary declares his insolvency or bankruptcy, or when a liquidator, administrative or judicial custodian, or trustee is appointed.
- 15.1.5 Or any position acting in place of these matters regarding all or part of the Beneficiary's assets or works or the Financed Asset.
15.2 Without prejudice to the provisions of the relevant systems and instructions, in the event of a breach case, the Financier may:
- 15.2.1 Discuss with the Beneficiary and agree with him to amend the Contract, or modify the Contract duration, or payment dates, or the amount of installments, or otherwise – as needed – to give the Beneficiary a chance to rectify his situation.
- 15.2.2 Agree with the Beneficiary to submit a request for early settlement according to the early settlement provisions in Article (10) of the Contract.
- 15.2.3 Collect his rights under any of the guarantees or guarantee documents held.
15.3 The Beneficiary is entitled to the cost of the amount exceeding the amount due to the Financier in the event the Financier executes on the guarantees and substitutes (if any).

Article (16): Death or Disability of the Beneficiary

16.1 The Beneficiary is exempted from his obligations under this Contract in the event of death or total disability, according to the controls and collection procedures for individual customers issued by the Saudi Central Bank. After the Beneficiary is considered to have fulfilled all his obligations according to the Contract, the Financier undertakes to issue a clearance letter to the Beneficiary and update his credit record with the Credit Bureau within the period specified by the relevant instructions and systems.
16.2 In the event that death or total disability is among the exceptions to exemption according to the controls and collection procedures for individual customers issued by the Saudi Central Bank, then when the Contract is collected, it shall be dealt with and ruled upon in this case according to the contract breach provisions in Article (15) of the Contract, as determined by the Financier.

Article (17): Notarization of the Contract

17.1 The Financier has the right to notarize this Contract and any of its appendices or guarantees and substitutes with the competent authorities.
17.2 The Financier bears the costs of notarizing the Contract (if any), and these costs are not allowed to be charged to the Beneficiary.

Article (18): Amendment of the Contract

The Contract or any of its articles or clauses may not be amended after its conclusion.

Article (19): Notifications

19.1 All notifications sent by the Financier to the Beneficiary must be in writing (paper or electronic) and are considered effective and binding. They are sent during working days and their times to any of the addresses listed in the Contact Data for Notifications specified in the Preamble of the Contract. The notification of delay or breach or knowledge of it by the party is not presumed to have arrived late.
19.2 Its content is only effective after one working day has passed from the date of its sending, and it is required to be sent to the Guarantor (if any).
19.3 The arrival of notifications sent by the Beneficiary to the Financier via one of his communication methods is presumed, and the party obligated to pay a due amount on its due date is not allowed to be the Financier and knowledge of its content to be active during working days and their times and one of the addresses listed in the Contact Data for Notifications specified in the Preamble of the Contract. If an email is sent on a non-working day, or after 17:00 on a working day, it is presumed to arrive to the Financier and knowledge of it on the following working day.
19.3 Each party must notify the other party immediately of any changes to his contact address. The party obligated to pay a due amount on its due date is not allowed to be the Financier and knowledge of its content to be active during working days and their times and one of the addresses listed in the Contact Data for Notifications specified in the Preamble of the Contract. If an email is sent on a non-working day, or after 17:00 on a working day, it is presumed to arrive to the Financier and knowledge of it on the following working day.

Article (20): Miscellaneous Provisions

20.1 The Beneficiary grants his consent to the Financier – for the purposes of this Contract – according to what is contained in the provisions of the relevant systems and instructions – to collect and process information and data, including credit information and collecting it to check the Beneficiary's credit record and verify his solvency and ability to pay, and to include his credit data. The Beneficiary also declares his awareness of the risks associated with that.
20.2 The Beneficiary grants his consent to the Financier to contact entities related to this Contract with any entity to obtain data and information and the salary, and to follow up with the entity in case any of the salaries changes to know the reasons.
20.3 The Financier undertakes to provide the Beneficiary with a repayment summary for this Contract – upon his request – to any of the addresses listed in the Contact Data for Notifications specified in the Preamble of the Contract.
20.4 The Financier undertakes – upon the Beneficiary's request – to reschedule the debt in the event it is proven that the Beneficiary's circumstances have changed (compulsorily or voluntarily), according to what is contained in the instructions issued by the Saudi Central Bank.
20.5 The invalidity of any article of the Contract or its non-systematic nature or non-enforceability does not lead to the invalidity of the Contract. The Contract is applied, and the Beneficiary is on correcting the invalidity.

Article (21): Applicable Law and Jurisdiction

21.1 This Contract is subject to the systems in force in the Kingdom of Saudi Arabia, and its interpretation and execution of this chapter in what arises from it of lawsuits are in accordance with it.
21.2 Any dispute arising between the Parties shall be settled amicably. If the Parties fail to resolve the dispute amicably within (15) working days from the date of its occurrence, any of the Parties has the right to submit to the competent judicial authority to settle the dispute.

And to indicate what precedes, this Contract was signed by the Financier and the Beneficiary (and the Guarantor, if any) on the day mentioned at its beginning:

Beneficiary	Financier
Name:	[Financier Name]
Title:
Signature:
Guarantor (if any)
Name:
Title:
Signature:

Appendix No. (1)

Installment Repayment Schedule

Contract No.	Number of Installments	Finance Amount	Installment Cost Rate (Profit)	Installment Cost Amount (Profit)	Annual Percentage Rate (APR)	Administrative Fees*	Total Amount Payable

*The phrase "Not Applicable" shall be inserted if the relevant item does not apply to the contract.

Installment No. (Month)	Installment Due Date	Day	Monthly Installment Amount (SAR)	Financed Asset Amount from Monthly Installment (SAR)	Installment Cost (Profit) from Monthly Installment (SAR)	Remaining Finance Amount	Remaining Total Amount Payable
1

Frequently Asked Questions Regarding the Model Form of Individual Consumer Finance Contract

(First Issue – Jumada al-Akhirah 1443 / January 2023)

Important Note:

This document serves as a reference guide for financing entities when concluding an individual consumer finance contract. It does not replace referring to the relevant systems and instructions, nor does it serve as a substitute for what is contained therein. Reliance must always be placed on the provisions in the systems and instructions. In the event of any conflict between what is contained in this document and the systems and instructions, the reference shall be to those systems and instructions.

Q1: What is meant by Individual Consumer Finance?

A: It refers to the definition of "Consumer Finance" mentioned in the Consumer Finance Controls issued by the Saudi Central Bank. Given that real estate finance and finance lease are excluded from consumer finance, the Model Form of Individual Consumer Finance Contract does not apply to real estate finance contracts or finance lease contracts (including vehicle finance lease contracts for individuals). This Model Form also does not apply to credit card finance contracts due to their different nature.

Q2: Does the Model Form of Individual Consumer Finance Contract apply to financing companies engaged in micro-consumer finance activities?

A: Yes, it applies to all financing companies licensed to conduct consumer finance activities, including micro-consumer finance companies.

Q3: What is meant by the finance format mentioned in the Contract Summary "Finance Data"?

A: The finance format is the format by which the finance will be granted, such as: (Murabaha, Tawarruq).

Q4: How is the installment amount processed if it is variable or if it is not monthly?

A: The Financier may modify the Model Form in topics related to monthly installments (including the repayment schedule) so that it conforms to the nature of the finance contract if the installments are variable, or if the installments are not monthly, with the following emphasis:

Any change resulting from that does not contradict what is contained in the Model Form of articles and provisions.

Q5: Must the customer's signature be obtained on all pages of the concluded finance contract, or is it sufficient to sign only the pages containing a signature box?

A: In the event the Contract is concluded in paper form: The customer's signature must be obtained on all pages of the Contract on which he is a party.
In the event the Contract is concluded electronically: The customer's electronic signature must be obtained according to what is contained in the provisions of the Electronic Transactions System, issued by Royal Decree No. (18/M) dated 8/3/1438H and its executive regulations, in light of the relevant systems and instructions.

Q6: How is the Preamble clause completed by the Financier?

A: The Financier must complete the Preamble clause and clarify the offer and acceptance of the Contract Parties and be consistent with its concluded format (Murabaha or Tawarruq or otherwise). The Beneficiary may refer to the Financier to what is contained in the Model Form of Real Estate Finance Contract and the Vehicle Finance Lease Contract issued by the Saudi Central Bank. The Financier may also refer the Beneficiary to what he has in previous consumer finance contracts, provided that this does not create a conflict with the Model Form of Individual Consumer Finance Contract.

Q7: What is meant by the Contract Appendix mentioned in Article No. (1) and others?

A: It refers to the Appendix that the Parties agree to attach to the Contract, such as: (Repayment Schedule, Authorization,