Statement by the Ministry of Commerce & Investment and the Saudi Arabian Monetary Agency on the Installment Selling System

19 May 2019

 

The Ministry of Commerce & investment and the Saudi Arabian Monetary Agency (SAMA) have announced the start of implementing the new regulatory procedures related to practicing selling by installments. This step will contribute to regulating the financing activities in the Kingdom, and this would avoid any differences in the requirements of such activities. This is to protect and regulate the financial and loan system in a fair and responsible way, besides reducing the incorrect and unfair transactions, taking into consideration the protection of consumers.

A joint statement issued by MCI and SAMA pointed out that according to the new regulatory procedures, new licenses will not be issued by MCI for practicing selling by installments, based on the Royal Decree No. (M / 13) dated 4/3/1426, applied by MCI before. Instead, SAMA shall develop a regulation for practicing selling by installments by a natural or moral character, provided that such regulations or provisions shall be completed within 90 days from the date of the issuance of the Supreme Royal Order. Meanwhile, the companies and establishments shall continue selling by installments, licensed by MCI, until the expiry date of their old licenses.

The said statement mentioned that MCI in cooperation and coordination with SAMA and other concerned parties shall control any violations committed by persons of natural or moral characters, who are involved in financing their goods or services to their clients, and who are violating the regulations, mentioned in paragraph (3) of Article (IV) of the Financing Companies Control System.

In this context, MCI and SAMA would like to emphasize that the consumers, who want to obtain financing, should go to the banks and financing companies licensed by SAMA. They also confirm that all those who had already licensed by MCI to exercise selling by installments, should not engage in any other activities not mentioned in their licenses. 


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Last Modified 19 May 2019
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