Sheikh Abdullatif Al Shelash Ponders Biggest Challenges Facing Saudi Loan Market

Abdullatif Al Shelash says Saudi Home Loans has made an undeniably positive impact on the people of Saudi Arabia, and the entity is just getting started. With the government finally allowing home loans in the …


Abdullatif Al Shelash says Saudi Home Loans has made an undeniably positive impact on the people of Saudi Arabia, and the entity is just getting started. With the government finally allowing home loans in the Kingdom of Saudi Arabia in 2012, Sheikh Abdullatif Al Shelash says mortgages in Saudi Arabia are still a novel product.

“Saudi Home Loans was the one that first have ignited the industry [and one of the first to] have started giving out mortgages even before the mortgage laws had full effect and full approval,” Abdullatif Al Shelash says. “[It was also] one of the first companies that actually have received the license from Central Bank in Saudi to really do that. It helped in the beginning in encouraging investors that yes, mortgage business is a viable business, feasible in Saudi.”

Abdullatif Al Shelash says the largest challenge facing the Saudi loan market currently is the growth of the other half of the mortgage industry, which is the securitization market.

“[This is] where a mortgage company will take 500 loans, 1,000 loans, bundle them into a security and offer them to investors to buy it. Securitize them and take a servicing fee, take a premium, and start getting more cash to really go and provide mortgage to others, which is the cycle globally,” Abdullatif Al Shelash explains.

Saudi Real Estate on Rapid Rise

Global research and advisory company Oxford Business Group is reporting that the Saudi real estate and construction sectors have been going through a lightning-fast expansion thanks to a variety of giga-projects and an economy bouncing back from the aftermath of the COVID-19 pandemic. Simultaneously, Oxford Business Group says that population growth and a young demographic are driving demand for a more extensive variety of real estate options and supporting infrastructure, such as mass transit.

Meanwhile, construction of The Line is in the works. According to, it will be a vertical city that’s 656 feet wide and 100 miles long with no cars, roads, or emissions. Projected to be home to 9 million people, The Line is expected to be a revolutionary new civilization with a focus on protecting the environment and legacy-free urbanism. The logic, according to, of going sans car is that typical living expenses such as car insurance, fuel, and parking will mean higher disposable incomes for citizens.

Abdullatif Al Shelash acknowledges that Saudi Home Loans changed the way Saudis get mortgages. The founding member and board member of SHL says it was among the first bank and finance companies to offer a complete solution to home ownership.

“This company was providing the financing at a time when in 2007, the concept of home finance was still not established in Saudi,” he says. “Eventually, the market caught up with the concept of home finance, and it became now a very chic industry, but when it started in 2007, it was totally new.”

Abdullatif Al Shelash emphasizes that Saudi Home Loans has been a major player in the market since 2007. Saudi Home Loans is also the most profitable company among nonbank mortgage companies, according to, with an annual growth rate of 40% in net profit.

“They were the first among the companies to promote home finance because the culture here was, ‘I would save to have the full price of my house or I would save to buy land, and then I will save to build a house on that land,’” Abdullatif Al Shelash says. “So they came in with a totally different concept. You don’t need to do that. We can give you a mortgage over 15, 20, or 25 years, and you can actually go and live in your home today.”

Al Arabiya news reports that home ownership in Saudi Arabia is slated to rise to 70% by the end of 2030. When Saudi Home Loans first started, a mere 22% of Saudis could call themselves homeowners.

One of the secrets to Saudi Home Loans success has been incubating Sharia-compliant solutions for those seeking home ownership in Saudi Arabia to obtain mortgages. Abdullatif Al Shelash says he also helped bring the International Finance Corporation to Saudi Home Loans and helped foster the IFC support loans and home ownership in Saudi.

Abdullatif Al Shelash says as demand for real estate continues to climb in the Kingdom of Saudi Arabia, he and his company Alaqtar Real Estate Development Company are keeping a close eye on the private sector.

Abdullatif Al Shelash Says Priorities Changing In Saudi Market

“[The] real estate sector was not that [high of] a priority for the country in the past,” Abdullatif Al Shelash says. “Right now, real estate sector has been the second biggest sector after oil petrochemicals in Saudi.”

Alaqtar is also continuing to develop second-tier cities, such as Buraydah, in the Al-Qassim region, where Abdullatif Al Shelash foresees a new wave of real estate opportunities popping up.

While securing a home loan in Saudi Arabia is still not a foolproof process, Abdullatif Al Shelash says it’s gotten much easier, with banks becoming more understanding of the real estate markets.

“Previously, if you want to purchase, or get a mortgage on a home, they will take the assets or the home of no value when considering the mortgage applications,” Abdullatif Al Shelash says. “Right now, I think including the assets as being the primary value and, the income of the person, the household, or including also the co-ownership of the loan has been part of the laws in Saudi, where the husband and the wife, actually both their income is pledged toward really getting their loan, I think tend to appreciate on that one.”

Although Abdullatif Al Shelash says some still don’t want to be tied to the responsibility of a 20-year mortgage in Saudi Arabia, he thinks mortgages are still a better option financially. “There’s going to be more appreciation,” he concludes. “[However] mortgage penetration in Saudi is still in its infancy. It’s at the beginning stage. Saudi Home Loans has gone public and I also encourage more investors to really contribute and invest in the mortgage industry.”

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