Credit: Tumisu from Pixabay.

Saudi Arabia is set to issue licences to the country’s first two digital lenders as part of its larger economic reform plan.

According to Saudi Press Agency (SPA), the Cabinet has given its go-ahead to the country’s finance minister to issue licences to STC Bank and Saudi Digital Bank.

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The proposals were approved during a virtual meeting chaired by King Salman, the report added.

Initially, STC Pay will be transformed into a digital bank called STC Bank with a capital of SAR2.5bn ($666.7m).

Subsequently, a group of investors will establish Saudi Digital Bank as a local lender with a capital of SAR1.5bn ($400m).

Later, Finance Minister Mohammed Al-Jadaan said on Twitter that the move is aligned with the Saudi Financial Development Program.

The Middle East country is now seeking to develop a digital infrastructure in the financial sector as part of the Vision 2030 programme.

Last year, the central bank of the country licenced 16 local fintech firms enabling them to offer payment services, microfinance and digital insurance brokerage.

Recently, a Saudi fintech called Tweeq secured a seven figure USD investment in the funding round. Tweeq will offer a spending account app to enable the users to receive and make payments, set budgets and financial goals.