What Influences Bank Lending in Saudi Arabia?
IMF Working Papers, February 13, 2017
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Bibliographic details
- Authors: Ken Miyajima
- Published: February 13, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475578669.001
Overview
- Study investigates determinants of bank-level credit growth in Saudi Arabia using a panel approach to data spanning 2000–15.
- Lending remained robust in 2015 despite a decline in oil prices, reflecting other supporting factors identified in the analysis.
Key findings
- Strong bank balance sheet conditions support bank lending.
- Economic activity supports bank lending.
- Oil prices support bank lending.
- Reduced bank concentration appears to have helped credit growth.
- Reduction in bank holdings of “excess liquidity” helped sustain lending in 2015 even as oil prices declined.
Methodology
- Applied a fixed-effects panel model (panel approach) at the bank level covering the period 2000–15.
Policy recommendations
- Bank balance sheets need to remain strong to support bank lending going forward.
- Fiscal adjustment would support credit provision to the private sector.
- Reduced reliance on banks to finance the budget deficit would support credit provision to the private sector.
Ken Miyajima, "What Influences Bank Lending in Saudi Arabia?", IMF Working Paper, February 13, 2017. https://www.imf.org/en/publications/wp/issues/2017/02/13/what-influences-bank-lending-in-saudi-arabia-44657
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- What Influences Bank Lending in Saudi Arabia?