| Project description |
| Riyad Bank and IFC are planning to establish a risk-sharing student loans facility in Saudi Arabia. The Facility will be used to provide loans to students who have difficulty affording the tuition fees for their tertiary education, thus providing them with up to five years to pay these fees. This will be the first private student loan financing facility in Saudi Arabia. The student loans originated under the Facility will be funded and serviced by Riyad Bank. |
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| Project sponsor and major shareholders of project company |
Riyad Bank is the fourth-largest bank in Saudi Arabia in terms of assets, with an 11.3% market share, and operates the third-largest branch network. It is a full service commercial bank, providing both conventional and Shari’a compliant products.
The Bank is publicly listed on the Saudi stock exchange (Tadawul), however only 38% of its shares are floated and available for public trading. The Bank’s major shareholders as of 1/15/2009 are the Public Investment Fund (21.7%), General Organization for Social Insurance (21.6%), Mr. Mohamed Ibrahim Al Issa (10.6%), Al Nahla Trading & Contracting Company Limited (9.9%) and SAMA (6.5%). |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is in the form of a risk sharing facility with Riyad bank. The size of the facility is expected to reach up to $80 million over the ramp up period. |
| Location of project and description of site |
| The facility will be available for students studying at private universities and colleges in Saudi Arabia. Riyad Bank has a branch network that can serve the target student population across the country. |
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| Anticipated development impact of the project |
The project will have a strong development impact by:
- Improved access and increased affordability for higher education for low income and female students in Saudi Arabia
- Foster ownership of one’s education
- Provide universities with more reliable and increased tuition fee collection mechanism
- Create a new assets class in the local financial market |
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| IFC's expected development contribution |
| This student loan facility project is encouraging the mobilization of funds into the education infrastructure in Saudi Arabia. IFC will also be supporting financial sector activities by working with Riyad Bank to develop an innovative new student loan facility. Through its role in structuring this student loan facility IFC will play a critical role in short listing private universities who will be eligible for the program to ensure quality of education and increase the employability of the graduates. |
| Environmental and social issues - Category C |
IFC's review of this investment has determined that it is anticipated that this student loan facility will have minimal or no adverse social or environmental impacts. Based on this review, the investment is categorized as C and no further analysis is required.
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| For inquiries about the project, contact: |
Nadeem Ishaque Khawaja
Vice President
Strategic Planning Department
PO Box 22622
Riyadh 11416
Saudi Arabia
Telephone: 401-303-2153 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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