## 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

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### 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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_Source: https://www.imf.org/en/publications/wp/issues/2017/02/13/what-influences-bank-lending-in-saudi-arabia-44657_