A subsidiary of Kuwait-based telecom operator Zain Group has been granted a licence by the Saudi Central Bank to provide micro-financing services to consumers in the kingdom through a mobile app.
The award of the licence to Tamam Financing Company, a FinTech set up by Zain Group in 2019, is the first of its kind by a regulator in the kingdom, Zain Group said in a statement on Sunday.
Tamam is a Sharia-compliant platform offering consumer micro-finance in less than five minutes, the company said.
“Investing in viable digital services such as the FinTech sector is a strategy we have launched a few years ago with Zain Cash and continue to implement across our markets as a critical component to our sustained evolution and success," Bader Al-Kharafi, vice-chairman and group chief executive of Zain, said.
Tamam aims to increase financial inclusion in the kingdom in line with the Financial Sector Development Plan of Vision 2030 programme launched by Crown Prince Mohammed bin Salman to diversify the economy.
The licensing follows the completion of an 18-month testing period within a regulatory sandbox set up by the Saudi Central Bank. The app and the service were vetted for functionality, security, and compatibility with customer user profiles in Saudi Arabia, in line with the sandbox's guidelines, the company said.
“Innovation and investment in digital services, such as FinTech, is at the heart of Zain KSA's vision to be the leading provider of digital services in the kingdom,” Sultan Al Deghaither, chief executive of Zain's Saudi Arabian business and Tamam vice-chairman and managing director, said.
Zain Group, listed on Boursa Kuwait, operates in Kuwait, Bahrain, Iraq, Jordan, Saudi Arabia, Sudan and South Sudan. It provides mobile services to more than 49.8 million active customers as of September 30, 2020.
Demand for digital payments and other financial technology services has burgeoned as more people use online banking services to transfer money and pay for e-commerce transactions amid the coronavirus pandemic.
Globally, digital payments are set to grow to $8.26 trillion in 2024, from $4.4tn last year, according to Statista.
In November, the Central Bank of the UAE said it opened a new FinTech office to fuel the growth of digital payments and improve financial inclusion in the country.