Jeddah- The Saudi Arabian Monetary Agency (SAMA) — Saudi Arabia’s central bank — reported an eight percent increase in gross loans approved by banks financing non-profitable government institutions and the private sector during August.

August figures amounted to a dashing SAR1,485.2 billion ($396 billion) compared to a SAR1,378.3 billion ($367.4 billion) registered in August, 2015.

According to SAMA’s published report, granted loans funding the private sector in Saudi Arabia had registered a seven percent increase, compared to last year’s 1,337 SAR billion, showing figures at SAR1,437 billion.

Government non-financial institutions have witnessed and increased 16 percent, registering a SAR47.9 billion.

The rise in the overall loan index for the private sector proves clear progress amid circumstances of international economic growth slowdown banking expert Siraj Al-Harthy told Asharq Al-Awsat newspaper.

The boost was a result of companies and institutions’ need of liquid assets so that projects reach completion.

Saudi banks are more inclined to approve large loans for established institutions and companies, for the lower risk factor compared to approving personal loans.

Even though, outstanding real estate loans extended by banks to retail customers totaled SR108.2 billion ($28.9 billion) at the end of August, central bank data shows.

Harthy explained that Saudi banks will benefit greatly from investing companies entering the national market, through financing most of their prospect projects. More so, rising competition among banks would add to the national economic wheel.

Managing Director at the National Commercial Bank(NCB) Saeed al-Ghamdi says that the financing rates approved for commercial entities during the first part of 2016 increased by 13.2 percent, setting it at a whopping SAR168 billion.

For his part, Ghamdi pointed out that NCB’s funding of the commercial sector is a major part of the role the bank plays in vitalizing and enhancing Saudi economy.