Infrastructure Financing through Islamic
Finance in the Islamic Countries
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4.4. Saudi Arabia
4.4.1. Financial Sector and Islamic Finance Overview
The Saudi Arabian economy is currently guided by Vision 2030 which was launched in 2016.
The vision has three pillars (a vibrant society, a thriving economy and an ambitious nation)
and six strategic objectives that include strengthening the Islamic and national identity,
offering a fulfilling and healthy life, growing and diversifying the economy, increasing
employment, enhancing government effectiveness, and enabling social responsibility. The
document recognizes the role of establishing the necessary infrastructure to realize Vision
2030 and support its objectives. Several specific programs were initiated to accomplish
various aspects of the Vision, which include the National Transformation Program, Financial
Sector Development Program, Public Investment Program, Housing Program and National
Companies Promotion Program.
The financial sector of Saudi Arabia is well-developed compared to the averages of the OIC
countries and the Middle East and Central Asian (MECA) region. Chart 4.4.1 shows that the
overall index of financial sector development stands at 0.52, which is significantly higher than
that of OIC (0.23) and MECA (0.28). While the financial institutions index and financial markets
index show similar trends, the latter appears to be significantly more developed in Saudi
Arabia (0.62) compared to the two country groupings with indices of 0.13 and 0.17 for OIC and
MECA countries respectively.
Chart 4.4. 1: Relative Financial Sector Development in Saudi Arabia (2016) (0-1 Highest)
Source: IMF Financial Sector Development Database,
493C5B1CD33B&sId=1481126573525
The size of the financial sector and its breakdown into different sectors in Saudi Arabia are
shown in Charts 4.4.2 and 4.4.3. Chart 4.4.2 shows that the total financial assets are valued at
SAR 4.7 trillion (USD 1.25 trillion), which is 192% of the GDP. The financial institution assets
are worth SAR 2.8 trillion (USD 750 billion), constituting almost 60% of total financial assets.
Chart 4.3 shows the relative size of different financial institutions in Saudi Arabia. The banking
sector is dominant with 51% of the assets, followed by the pension fund (26%) and other
specialized financial credit institutions (19%). The Financial Sector Development Program
0.23
0.28
0.52
0.33
0.38
0.42
0.13
0.17
0.62
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
OIC Average Middle East and Central Asia Saudi Arabia
Index value (0-1Highest)
Financial Development Index Fin. Institutions Index Financial Markets Index