Saudi Arabia, the largest economy in the GCC, has been attracting international investors like a "strong magnet," says David Hunt, who has been appointed as the CEO of Gulf Installments in Saudi Arabia.
With its economy remaining buoyant and strong, supported by high oil prices and its spending plans, the "Kingdom's SR 1.6 trillion economy is expected to grow by 4 percent to 5 percent in 2013," Hunt told Arab News in an exclusive interview.
Saudi-based Gulf Installments is focusing on providing Shariah-compliant credit solutions to businesses across a variety of sectors and assets.
Within five months of commencing operations from its Jeddah-based headquarters, Gulf Installments has opened a full-fledged branch office in the Kingdom's commercial city and will be launching its offices in Riyadh during the third quarter of this year, said Hunt, who in his capacity of managing director served for over 24 years offering financial services in emerging markets and has extensive regional knowledge.
The company plans to serve small and medium enterprises (SMEs) in the Eastern Province by opening a Gulf Installments office in Dammam during the second quarter of 2014, said Hunt who has been welcomed in his new position as "perfectly placed to lead the company as its operations expand Kingdomwide."
"This expansion is in line with the company's commitment to make its Shariah-compliant credit solutions available to SMEs across the Kingdom," he added.
"Although Saudi SMEs account for 90 percent of Saudi businesses and 24.7 percent of total employment, they represent only 2 percent of the Saudi banks' lending market. With over 500,000 SMEs in the Kingdom, many of which are underserved, credit demand outpaces supply," he said.
Terming Gulf Installments' launch in Saudi Arabia as a success, Hunt said the company is currently providing Shariah-compliant installment and leasing services to SMEs from across a variety of sectors, from contracting and construction, to health care and education; whether they need to establish their business or expand it by purchasing assets such as heavy plant and machinery, medical equipment, or contracting and constructing equipment.
The key to Gulf Installments' success is to give customers quick finance in quick time, he said and estimated the Kingdom's "very huge" installment and lease market to be worth SR 5 billion to SR 40 billion.
During the first three months of operations, Gulf Installments executed 30 deals ranging from SR 300,000 to SR 8 million, the average deal being between SR 1 million to SR 3 million, he added.
Gulf Installments, with SR 100 million capital, is a member of Saudi Credit Bureau (SIMAH) and follows strict rules of Saudi Arabian Monetary Agency ( SAMA ), Hunt said, adding that SAMA is introducing new regulations to supervise financing across the Kingdom.
Gulf Installments was established in 2012 by SHUAA Capital following the success of Shuaa's subsidiary Gulf Finance Corporation in the UAE.
The key to the company's growth has been the considerable increase in demand for equipment (financing) mainly in the manufacturing, construction and contracting sectors, he said.
While discussing problems related to housing in the Kingdom, Hunt said: "Gulf Installments doesn't finance housing directly."
He, however, emphasized that the Kingdom needs a major housing solution as the population is growing very rapidly and there is a real shortage of affordable housing.
"The Ministry of Housing is working very hard to find lands and then it will start giving lands and loans to build houses. This will help in solving the housing problem."
Hunt said: "For its youth, Saudi Arabia offers plenty of opportunities. They have to work hard and go step by step to achieve success." Gulf Installments is investing heavily into people and encouraging young Saudis to come forward and join this business, he added.
"Our success in such a short period of time in Saudi Arabia has been as a result of bringing in the best team of talented experts with Saudi talent at the heart of that team," said Hunt, who obtained over 25 years extensive experience of operating across a variety of businesses in emerging markets with HSBC, including being the managing director for SABB Takaful.
"We will continue to focus on hiring Saudi nationals, and transferring the know-how and sector expertise to them. They are the future of this country and nationalization has been one of our key drivers, strengths and priorities," he said.
Prior to joining Gulf Installments, Hunt held various senior and director-level positions at the HSBC Group.
He was managing director and chairman of the executive committee of SABB Takaful, a Saudi publicly quoted insurance company, and most recently head of regional insurance at HSBC Bank Middle East.
He will now lead a team of seasoned bankers, financial veterans and credit professionals.