DGDA Signs MoU with Al Rajhi Bank to Help Fund Home Buyers
22 Jun 2022
The Diriyah Gate Development Authority (DGDA) has signed a Memorandum of Understanding (MoU) with Al Rajhi Bank to provide financing options for the purchase of residential property units. The agreement facilitates financing for individuals looking to purchase homes in DGDA’s residential projects and bolsters cooperation on real estate investments, banking services, and other areas related to the coordination, development, and implementation of projects and initiatives.
The MoU was signed by Jerry Inzerillo, Group CEO of Diriyah Gate Development Authority, and Waleed Al-Mogbel, Chief Executive Officer of Al Rajhi Bank. The agreement will pave the way for cooperation discussions across fields such as corporate and retail banking, sharia-compliant solutions, and e-commerce products intended to help DGDA improve efficiency and manage administrative challenges such as import and export credit lines, bank letters of guarantee, shipping guarantee letters, and online supply chain finance. Additionally, the agreement includes cooperation with the bank’s corporate banking group for solutions to manage cashflow, collection, and payments, as well as managing digital payments through DGDA’s online portal.
Under the terms of the MoU, the two parties will also explore the possibility of the bank offering off-plan sales management using tools including an advanced user interface and reporting system, which would enable DGDA to achieve granular visibility over its projects. The two sides also agreed to develop new ways to offer financial backing to individuals looking to buy homes around Diriyah, together with the possibility of extending comprehensive banking services to DGDA’s staff at competitive rates.
The MoU also covers working with Al Rajhi Bank’s insurance arm, Takaful, to offer Sharia-compliant insurance for DGDA’s properties and staff, including medical, vehicle, and savings insurance policies.
Mr. Inzerillo stated that one of the MoU’s main goals is the training of DGDA staff on financial management, adding that the two parties would collaborate on categorizing real estate developers according to their credit ratings, in addition to exchanging expertise and research. “With this MoU, we aim to help ensure financial sustainability and maximize the returns on our assets, as well as upskill and train our people to help achieve our ambitious goals,” he commented.
Meanwhile, Mr. Al-Mogbel indicated that the MoU will create potential opportunities for the creation of new real estate funds designed to finance specific types of developments, lease them, and then divest them if and when needed.
He also stated that real estate funds can be founded to operate on the sell-sublet model, with cashflow and investment management tools tailored to each individual project, as well as joint financing with other banking institutions. In conclusion, he expressed his hope that the agreement would bolster collaboration between the two sides to accomplish their mutual goals.