Posted: January 27th, 2023
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1. Discuss the benefits and challenges for investors if they are investing in international assets. [Word limit: 300 to 400 Words]
2. Discuss the opportunities and challenges for the banking industry in Small Business financing in Saudi Arabia.
[Word limit: 300 to 400 Words]
3. constructive comments on the following (Word limit for each comment: 50 to 80 Words)
A) Retail banks, private investment programs, specialized lending institutions, the Saudi Arabia Monetary Authority (SAMA), and the stock market make up Saudi Arabia’s banking system.
The Central Bank of Saudi Arabia (SAMA) was established to oversee banks and financial institutions and oversee the country’s monetary policy.
There are a number of ways the banking industry can help small businesses get financing. Some of these strategies include providing entrepreneurs with access to financing, other options for funding, and new markets. Additionally, banks are capable of issuing loans, credit cards, and other financial instruments. Additionally, banks can provide guidance and assistance to owners of small businesses.
The Saudi banking industry faces numerous challenges when it comes to funding loans to small businesses. The significant risk of lending to owners of small businesses, the absence of small businesses’ collateral, their inaccessibility to international capital markets, and the absence of an efficient banking infrastructure are some of these issues. Additionally, banks don’t have much reason to lend money to small businesses because the costs of doing so may be prohibitive in comparison to the money they gain.
If Saudi Arabian banks want to help small businesses get loans, they need to come up with effective ways to manage risks and offer products and services that meet the needs of business owners. In addition, banks need to work hard to build trusting relationships with owners of small businesses and give them access to global financial markets. Last but not least, the government ought to continue providing banks with incentives to lend money to small businesses. Saudi Arabia’s small business sector will be strengthened and stabilized as a result of this.
B) The financial industry’s future is predicted to be shaped by the disruptive global phenomenon known as fintech. The Saudi Arabian FinTech ecosystem and environment are described in this paper along with their features and traits. Examples of cutting-edge Saudi Arabian financial companies are highlighted, including peer-to-peer lending, internet banking, transfer and payment systems, crowdfunding platforms, and blockchain efforts. Within the ecosystem, there have been a number of changes over the past five years. Saudi banks, for instance, are now acting with greater caution. FinTech projects, on the other hand, are also being created internally, which encourages technology firms and start-ups to concentrate their efforts on innovations that aim to enhance existing procedures rather than novelty. Government efforts are primarily focused on projects involving rules and legislation. The public is intrigued by new products that are convenient and easy to use. We compare the Saudi FinTech ecosystem to the United Arab Emirates’ FinTech ecosystem and conclude with recommendations for the different stakeholders.
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