Saudi business sector boom spurs growth in bank credit

Bank credit to financial and insurance activities in May also rose 29.41 percent on an annual basis to SR95.77 billion. (SPA)
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Updated 09 July 2023
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Saudi business sector boom spurs growth in bank credit

  • Saudi business sectors saw a boom in May, with banks extending loans, overdrafts and lines of credit

RIYADH: Saudi Arabia’s business sector saw a boom across most segments in May, with banks extending loans, overdrafts and lines of credit to companies seeking to invest in their projects, purchase capital goods and expand operations.

Out of the 16 business segments of the National Classification of Economic Activities, 15 registered an annual increase in bank credit for May. The only segment that witnessed a dip was agriculture, forestry and fishing, which fell by 8.06 percent.

Bank credit to professional, scientific and technical activities in Saudi Arabia increased 49.49 percent to SR5.01 billion ($1.34 billion) in May, from SR3.35 billion in the same month last year, showed the latest data from the Saudi Central Bank, also known as SAMA.   

SAMA’s recent monthly report revealed that the segment also recorded a 21 percent increase in bank credit compared to SR4.11 billion in April.

It encompasses a wide range of professional services, including legal and accounting, architectural and engineering, technical tests and analysis, and research and development in scientific fields.

The Kingdom has seen significant growth in the segment, with state-run institutions such as Research Development and Innovation Authority collaborating with the private sector to promote innovation and entrepreneurship.

The sector is also set to play a crucial role in the Kingdom’s Vision 2030 diversification strategy that aims to reduce dependence on oil revenues and develop a knowledge-based economy, with German research platform Statista projecting it to reach $8.5 billion in 2024.

Boosting the energy mix

The other segment that attracted significant bank credit was that covering electricity, gas and water suppliers, which booked a 34.79 percent rise to SR124.49 billion in May from SR92.35 billion in the year-ago period.

The segment also includes activities such as generating, transmitting and distributing electricity, gas and steam.

Water collection, treatment and supply are also included, as is the production and distribution of ice.

One of the biggest drivers in this sector is the Saudi Vision 2030 blueprint that aspires to replace the petroleum used to generate 42 percent of the country’s 110 gigawatts daily electricity needs with a mix of 50 percent natural gas and 50 percent renewable energy by 2030.  

Moreover, the Ministry of Energy’s spending on power and renewable energy projects is expected to reach $293 billion by 2030.

HIGHLIGHT

Bank credit to professional, scientific and technical activities in Saudi Arabia increased 49.49 percent to SR5.01 billion ($1.34 billion) in May, from SR3.35 billion in the same month last year.

“Serious actions have been taken by the Kingdom aiming to diversify the energy supply mix and introduce energy efficiency programs. This strategy would benefit Saudi Arabia in the long-term by lowering the reliance on fossil fuels,” said Hani Aldhubaib, assistant professor of electrical engineering at Umm Al-Qura University, in his paper on the future of electrical energy in Saudi Arabia published in December 2022.

Financial force

Bank credit to financial and insurance activities in May also rose 29.41 percent on an annual basis to SR95.77 billion. The segment also received loans worth SR101.43 billion in March, its highest since May 2022..

The segment includes national commercial banks, branches of foreign commercial banks and firms involved in financial technology and management of cash centers.

Much of the growth in this segment can be attributed to the Kingdom’s expanding economy, which has increased demand for financial services, such as loans, investments, and insurance coverage.

Quick estimates for the first quarter of 2023 indicate that real gross domestic product increased by 3.9 percent compared to the same period a year earlier, fueled by 5.8 per growth in non-oil activities and 4.9 percent in government services.

“By leveraging favorable macro conditions and strong sector growth, Saudi banks can pursue strategic investments to grow revenues and optimize costs,” said Markus Massi, managing director of the Middle East office of Boston Consulting Group, in its recent report on the Kingdom.

SAMA has also been instrumental in driving the financial and insurance sector by creating a regulatory environment that provides stability and confidence, encouraging banks to lend to the industry.

In the first quarter, the bank launched the Open Banking Lab, enabling banks and fintech companies to develop, test and license open banking services.

Realty check

The property market has also been up, with bank credit to real estate activities increasing 29.39 percent to SR227.36 billion in May, compared to SR175.71 billion in the same month last year.

According to the NCEA classification, this segment comprises buying, selling, leasing and managing warehouses and residential and non-residential properties.

The stimulus to this growth has been spurred by a growing population, urbanization, and increased demand for housing.

This demand and government initiatives to address housing shortages and improve affordability have created opportunities for real estate companies to undertake residential projects.

“The provision of world-class housing sits at the heart of Vision 2030. With demand pivoting toward community living, there remains an opportunity to develop more town housing, which offers the privacy and outside space buyers are looking for,” said Yazeed Hijazi, associate partner, real estate strategy and consulting, Knight Frank, in its recent report on Saudi Arabia.

The overall increase in bank credit among various economic segments is a reason to cheer as it leads to increased business activity, job creation and higher production levels, contributing to economic growth and the lofty ambitions of Vision 2030.

 


Mapping Saudi soils to grow better crops

Updated 19 December 2025
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Mapping Saudi soils to grow better crops

  • Palm trees, root crops, and coastal plants reveal the land’s story

RIYADH: Saudi Arabia’s land tells stories written beneath the feet. From fertile plains and rugged highlands to vast deserts, the Kingdom’s diverse landscapes shape what can grow, where it grows, and how agriculture can thrive.

Alongside geography and climate, soil conditions play a decisive role in agricultural success. Understanding soil types across the Kingdom helps determine which crops can flourish and what interventions may be needed to sustain them.

In an interview with Arab News, Turki Almutairi, a senior environmental specialist at the National Afforestation Center under the National Center for Vegetation Cover Development and Combating Desertification, outlined the main soil types found across Saudi Arabia.

High amount of salt makes the soil unfit for the production of most crops, even if the soil is fertile. (Supplied)

“The dominant soil in the Kingdom are sandy desert soils, alongside calcareous soils in the central region. Rocky and stony soils are present along mountainous and hilly landscapes,” he said.

“Alluvial soils are common in wadies (valleys), while saline and sodic soils are located in depressions (Sabkhas) and along coastlines. Pockets of clayed soils can be also found around few sites along the Kingdom.”

The Kingdom’s vast territory gives rise to unique soil characteristics in each region, enabling different crops to grow depending on local conditions.

“Soil is the growing medium for plants. The role of soil includes structural stabilization, providing nutrients and a communication medium for plants,” Basil Nasir, soil lead at engineering consultancy William Sale Partnership, told Arab News.

Basil Nasir, soil lead at the engineering consultant company, William Sale Partnership (WSP). (Supplied)

According to Nasir, assessing soil use is essential before determining whether it is fertile or infertile, as different soils support different plant types.

“The soil used for trees differs from the soil used for ornamental plants and from the soil used for aquatic plants. It varies according to the specific needs of each plant, and based on this, we determine what the soil requires and assess its fertility,” he said.

Nasir explained that soil characteristics are shaped by both physical and chemical components. In addition to water and air, mineral particles such as sand, silt and clay are key indicators of soil health. Organic matter, derived from plant and animal remains, forms the fourth major component.

The balance between these elements determines soil behavior. One important physical trait is water-holding capacity, which influences what types of plants a soil can support.

 

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“If the soil is like dunes, adding water will cause it to run off, but if the soil is clay, its ability to retain water will be very high. If you add water and return the next day, you will find that the water is still there,” said Nasir.

Chemical properties, such as whether soil is alkaline or acidic, are equally important. Understanding both physical and chemical traits allows for proper assessment and treatment when needed.

“What determines whether a plant is suitable for a particular environment is primarily the plant's nature. For example, some plants have fibrous roots and therefore do not require well-draining soil,” Nasir added.

“A palm tree, for example, does not care whether it was planted in one soil or the other because its roots are fibrous. Therefore, palm trees are strong plants and are suitable to grow in both dry and wetlands, while preferring sandy areas.”

Soil Salinity can be treated through Soil leaching which means washing the soil with certain amount of water to reduce the salt in it. (Supplied)

Crops such as potatoes, onions, carrots and beetroots — where the edible part grows underground — typically thrive in sandy soils. As a result, plantations of these crops are commonly found in northern regions such as Hail and in Wadi Ad-Dawasir.

In the eastern region, including Al-Ahsa, wetlands are more common due to climatic conditions. Growing plants in such environments often requires human intervention.

“Plants that are coastal or could be found in lagoons or lakes must have some sort of soil around them, like lotus flowers and mangrove trees.”

“An important parameter to keep in mind is that there is no air in its soil, and they are adapted to this condition. However, the lack of air, along with the presence of organic matter, will create a situation where anaerobic bacteria react with the soil, potentially causing diseases we can easily avoid,” said Nasir.

He emphasized that removing organic matter from such soils is essential to ensure plant survival in aquatic environments.

Mountainous and rocky regions in Saudi Arabia are generally volcanic, resulting in low water-holding capacity and challenging growing conditions. However, volcanic ash contributes to high fertility, allowing certain crops to flourish.

As a result, western regions support tree crops such as coffee, mangoes, some banana varieties and pomegranates.

There are various types of soils such as clay, sandy, silty and loamy. Each type provides excellent conditions for specific plants. (Supplied)

As development accelerates across the Kingdom, soil improvement efforts are expanding under the National Greening Program.

“Soil is considered fundamental for the National Greening Program’s objectives. Understanding the soil variability along the Kingdom is a precondition for fostering sustainable soil management,” Almutairi told Arab News.

Adding, “In this line, the NGP is working towards the establishment of the Saudi Soil Information System (TURBA-KSA), which consists of mapping soils and its functional properties in the Kingdom using state-of-the-art technology.”

He also noted the creation of the “Land Rehabilitation Watch” to report, verify and monitor land rehabilitation nationwide.

“This milestone allows the Kingdom to understand how soil and land health are progressing against national and international targets of land degradation neutrality. Documenting good soil and land management practices is also important, so that those successful practices could be scaled up along the Kingdom, which is a priority task for NGP,” he said.

Raising public awareness is another key pillar of the program.

“Assessing different emerging technologies and soil amendments is a daily activity of NGP, as it then provides technical support to partners on the selection and application of these technologies.”

DID YOU KNOW?

• Saudi Arabia cultivates around 1 million hectares, mainly in Riyadh, Qassim, Hail, and Jouf.

• Farming follows the seasons: winter brings onions, garlic, and carrots, while summer yields watermelon, tomatoes, and cucumbers.

• The Kingdom is a top date producer, with over 31 million palm trees generating nearly 1.54 million tons, especially in Riyadh and Qassim.

Almutairi stressed that soil is often overlooked because it lies unseen beneath the surface, despite its critical role.

Yet soil produces 95 percent of food, stores water, holds more carbon than vegetation and the atmosphere, suppresses contaminants, regulates water, carbon and nutrient cycles, and hosts microorganisms linked to the human microbiome.

He emphasized the need to engage the general public, particularly urban communities disconnected from nature. Education helps people understand where food comes from and how contact with soil — such as walking barefoot — can support well-being. Healthy soils also contribute to cleaner water and air, he added.

Almutairi also called for stronger advocacy among decision-makers, noting that investment in healthy soils supports climate action, food security and sustainable development.

He concluded that key strategies include officially observing UN World Soil Day on Dec. 5, integrating soil education into curricula, launching annual social media campaigns, using art to raise awareness, and organizing public events that connect soils to everyday life.