#sabb

The Saudi British Bank or SABB has long since been trying to improve its offerings to re-exporters and importers in the KSA (Kingdom of Saudi Arabia). And keeping in line with this attempt, they finally completed their first sharia-compliant inventory finance transaction in March.

According to this deal, the SABB will be financing Al Safi Dairy, a Saudi Arabian dairy company. The dairy company is a joint venture between a European multinational and a massive group in the KSA. SAAB’s funding will be related to the company’s vast exports in the region and imports of feedstock. 

SABB’s new solution is based on a Murabaha structure and is their first venture into the inventory finance area. This move came right after the new SCF or sharia-compliant supply chain finance product that they launched in the closing half of 2021. Under this scheme, the bank has resolved to provide finances for the domestic suppliers of  Almunajem, Saudi Arabia’s food company.

With this off-balance sheet solution, clients can now improve their working capital and leverage their inventory assets. They can now participate in pricing and gather goods without putting the inventory on their balance sheets.