To integrate Islamic finance into its domestic economy, the country will introduce several key instruments like Murabaha (financing customers through instalment credit sales), Mudaraba (profit-sharing investments or fund attraction), Wakala (providing or attracting funds via agency agreements), Musharaka (financing clients through joint business activities), Salam and Istisna (financing through advance payments for goods) and Islamic leasing (Ijara), which will provide property under Sharia-compliant lease terms.

To support the adoption of these tools, the government will implement specific tax exemptions. While value-added tax (VAT) will not be applied to the markup on goods sold via Murabaha (Sharia-compliant financing structure, often called ‘cost-plus financing’), income generated from investment deposits will be tax-exempt as well. Furthermore, Islamic leasing agreements will be legally equivalent to financial leasing and traditional leasing.

To ensure systemic management and compliance with Sharia standards, the Central Bank of Uzbekistan will have its Islamic finance council. Additionally, banks providing these services will be required to form their own internal councils.

The panel, while operating under the Central Bank of Uzbekistan, will be tasked to develop industry standards, draft regulatory legal acts, provide clarifications on disputed issues, review contracts and internal documentation and ensure overall compliance with Islamic financial principles.

The latest policy move follows the Central Asian country’s Senate’s approval of the law on the introduction of Islamic banking activities in February 2026, marking a significant step toward modernising the nation’s banking sector.

Officials also proposed additional plans, such as establishing bodies like the Tashkent International Financial Centre and the International Centre for Digital Technologies. These will infuse Islamic finance mechanisms into the country and help Uzbekistan position itself more competitively in the global economy amid rising geopolitical uncertainty and intensifying competition for foreign investment. Officials see the country’s natural resources, economic potential, and ongoing reforms as the main engines for creating favourable conditions to attract international companies exploring new markets.

Tashkent International Financial Centre will likely serve as a platform for new investment flows. By 2030, it is projected to attract an additional USD 20-25 billion, contributing up to 1% of Uzbekistan’s annual GDP growth, in addition to creating as many as 15,000 jobs.

The centre will operate under a special legal regime, incorporating elements of the common law system of England and Wales, thereby allowing its governing bodies to adopt independent regulations. The platform will also have a Tashkent International Commercial Court and an International Arbitration Centre to handle disputes, while providing investors with benefits like tax incentives, simplified visa procedures, the capability of freely moving and repatriating capital, and access to modern financial instruments, including digital assets.

The International Centre for Digital Technologies, on the other hand, will operate under the “Enterprise Uzbekistan Brand.” The centre will function under a special legal framework, expected to remain in place until 2100. Within a regulatory sandbox, companies will be able to test new technologies, pay salaries in foreign currency, and operate under international labour and data standards.

The digital centre will also focus on AI, data processing, research and development, and startup support. By 2030, it is expected to attract up to 1,000 companies, create over 300,000 jobs and generate export revenues of up to USD 5 billion.

The post Uzbekistan’s Islamic financial framework: All you need to know appeared first on International Finance.

Commercial Islamic banks operate as normal market-based financial institutions. However, their operational framework, compliant with Sharia principles, sets these entities apart from the non-Islamic segment. These values prohibit the interest payment, also known as riba, and outlaw purely speculative transactions.

Besides these contractual obligations, Islamic banks finance the same needs (SMEs, trade, housing, equipment and imports) as their conventional counterparts. Financing gets structured around contracts anchored in the real economy, such as Murabaha (cost-plus financing that avoids interest-based lending), Ijara (leasing arrangement), or Musharaka (risk- and profit-sharing partnership).

Also, Islamic banking is gaining prominence in Africa. UAE-based Dubai Islamic Bank (DIB) made the first move in 2022. Through its subsidiary “DIB Bank Kenya,” the venture announced the opening of a branch in Nairobi’s business district to strengthen SME financing and facilitate trade flows between Kenya and the UAE. DIB’s strategy has been to capitalize on the East African country’s growing economic hubs.

In Egypt, Abu Dhabi Islamic Bank (ADIB) has taken a different approach, by consolidating its longer-established and deeply rooted presence further. ADIB’s growing prominence in Egypt also makes the North African major a key entry point for other Gulf-based commercial Islamic financial entities, which combine elements such as retail banking, corporate financing and capital market operations in their product offerings.

However, alongside the expansion of Gulf banks, there is also evidence of a less obvious but equally significant phenomenon: the development of African players to dominate the sharia-compliant market while using the Gulf as a springboard to raise their profile.

Nyla Bank, a Ghanaian fintech described as a pan-African digital Islamic bank project, was selected as a semi-finalist in the Milken Motsepe Prize in FinTech in 2024 and is set to make a presentation at the Middle East and Africa summit organised by the Milken Institute in Abu Dhabi. This, therefore, also suggests that the sector’s development is being driven by African players with ties to the Gulf.

Apart from physical networks, some transactions evidence the increasing incorporation of commercial Islamic banks into African financing circuits, especially regarding syndicated murabaha operations and capital markets interventions. The aforementioned operations evidence a gradual, though targeted, level of integration into African economies. The commercial dimension is complemented by the second pillar of Islamic finance in Africa: development institutions.

Discussing Islamic banking’s growth in Africa, Saudi Arabia is also playing an important role. Jeddah-based Islamic Development Bank has now emerged as a dominant force for multilateral Islamic financing on the continent. Its operations focus on public projects, trade finance and risk mitigation, going well beyond traditional banking activities.

Meanwhile, Kuwait has largely concentrated its Islamic banking activities in North Africa, with Egypt emerging as the primary hub. Kuwait Finance House also enhanced its presence in 2025 by changing the name of Ahli United Bank Egypt to “KFH Egypt.” KFH Egypt is an entity that is fully sharia-compliant and has a considerable branch network. This is in addition to capital markets; an example is the issuance of sovereign sukuk with the involvement of KFH.

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Asialink has been a market leader in the Philippines’ finance industry for 28 years, supporting MSMEs, the backbone of the economy. Its financing solutions specifically cater to small, individually run enterprises and growing women-led businesses, enabling sustainable growth while addressing the ever-changing financing needs of their MSMEs. The recognition by the International Finance Awards, along with other global honours, further demonstrates the quality of the company’s services, which present inclusivity and excellence in supporting MSMEs through innovation, reach, and measurable economic impact.

Samuel Cariño, President and CEO of the Asialink Finance Corporation, said, “As a company committed to delivering accessible and reliable financial solutions, we are honoured to be recognised as the Best SME Finance Company and Best Auto Financing Company. These recognitions are not just milestones; they reflect our purpose and mission to empower Filipino entrepreneurs and individuals. They also serve as motivation to continue raising the bar, innovating our services, and exploring new ways to support the growth of our clients and communities. As we continue to expand our reach, we remain steadfast in our mission to innovate, serve with integrity, and help more Filipinos move forward with confidence.”

The company’s recognitions reflect years of consistent effort to bridge financing gaps, particularly for underserved segments facing limited access to formal credit. By December 2025, the company had released P16.6 billion in loans, a figure expected to grow steadily in 2026, highlighting strong demand and sustained trust from the Filipino communities the business serves.

A key pillar of Asialink’s SME strategy has been inclusive finance, particularly through initiatives supporting women entrepreneurs. The company launched the Women’s Access to Inclusive Support (WAIS) Loan, a programme providing financial tools for women-led enterprises in the Philippines to scale operations, manage challenges, and create long-term impact.

“We’ve seen how women entrepreneurs continue to push forward even in the most challenging times. Their strength, grit, and passion drive their own success and the growth of communities around them. Supporting women in business means investing in progress that uplifts families and fuels the nation’s economy,” Samuel Cariño told the International Finance.

Asialink recognises that many entrepreneurs build businesses to support families, strengthen communities, and create opportunities. By offering flexible, customer-centric financing, the company enables MSMEs to pursue growth that’s both economically viable and socially responsible.

“This year has been monumental for us at Asialink—marked by major milestones, meaningful partnerships, and the continued trust of the communities we serve. From empowering MSMEs and women entrepreneurs to celebrating industry recognition, our achievements are made possible by the dedication of our team and the confidence of our clients and partners,” the CEO noted.

Looking ahead, Asialink plans to expand its influence and impact across the region. According to Eleanor Yap, the company’s Chief Operating Officer (COO), Asialink will sustain momentum through strategic expansion, digital transformation, and people’s development.

“Asialink plans to maintain and grow its influence by exploring new markets and sectors, strengthening engagement with clients and partners, and continuously investing in technology and our people. This recognition inspires us to improve our systems further, introduce initiatives that support sustainable development, and empower businesses to thrive,” Eleanor Yap remarked.

Asialink’s recognition accentuates its continued role as a trusted partner to growing businesses and individuals. The company remains focused on making financing more accessible and relevant, helping MSMEs move forward and creating a positive impact for entrepreneurs, communities, and the economy they support.

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Tareq Amin gave the update while speaking at the PIF Private Sector Forum (held on February 9th and 10th), stating that the Kingdom has the necessary resources, including abundant energy supplies and strong geographic connectivity, to establish itself as a global AI powerhouse.

The Humain CEO’s remarks also align with Saudi Arabia’s Vision 2030 strategy, which seeks to transform the Kingdom into a leading regional technology hub by the end of the decade.

“Humain is a company that has an ambition to become a global player in this important space. We are an AI total value chain company, focused on Humain core, which is our data centres. These are not small data centres. We are talking about gigawatt capacity,” Tareq Amin said.

Emphasising the critical role of energy in AI’s development, Tareq Amin said, “AI is an energy game. We have power, energy affordability and abundance, connectivity, land, and water. We have all that it needs to translate Saudi Arabia into the world’s largest AI token exporter.”

Tareq Amin further revealed that Saudi Arabia plans to launch and commercialise its own operating system in the coming months, potentially becoming the third country after the United States and China to do so.

“One thing I was deciding was whether to show you this here, but we have a big event coming at LEAP, and we will commercialise this. In the last meeting we had with Crown Prince Mohammed bin Salman, he referred to operating systems, specifically whether to use Windows or Mac. Saudi Arabia will be the first country outside the US and China that will commercialise its own operating system,” he said.

Talking about Humain, in January 2026, the venture agreed to a financing framework of up to USD 1.2 billion to expand AI and digital infrastructure across the Kingdom. The non-binding agreement outlines financing terms to develop up to 250 megawatts of AI data centre capacity to serve Humain’s local, regional, and global customers.

In December 2025, the company partnered with Saudi Telecom Co. to form a joint venture focused on developing and operating AI-driven data centres in the Kingdom. According to a Tadawul filing, Humain will hold a 51% stake in the venture, while stc will own the remaining 49%.

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“We estimate about half of their total funding, including debt and capital, has been financed by the Public Investment Fund. Recourse to bank borrowing is low but has been increasing. We expect banks’ giga-project financing to rise as projects approach operational phases and financing can be supported by cash flows,” the rating agency said.

Fitch estimates that bank financing to giga projects was a modest 5%-7% of average sector loans at end-2025. New project awards fell by almost 50% in 2025, but the value of contracts awarded since 2022 is about USD 435 billion, providing significant business opportunities for banks. This should put total exposure to giga projects, both on- and off-balance-sheet, below 10% of the sector’s combined credit risk, the report claimed.

“Delays in giga-project execution or substantial recalibration of their scale could affect the banking sector’s asset-quality metrics in the longer term. However, current low exposure means the projects are unlikely to lead to significant increases in system-wide Stage 2 and Stage 3 loan ratios in 2026-2027,” the report said.

Fitch expects financing requirements for broader “Vision 2030” diversification projects to translate into sustained strong bank loan growth, despite the announced recalibration.

“This will, in turn, drive greater diversification of Saudi banks’ funding sources, underpinning further growth of Saudi Arabia’s debt capital markets, including international issuance,” the agency continued, while adding, that Saudi banks’ exposure to these giga-projects remains modest but is likely to rise as some projects become operational.

“We expect banks’ giga-project financing to rise as projects approach operational phases and financing can be supported by cash flows. We believe this type of financing mostly carries risk-weighting of around 80%-130%, so greater lending to these initiatives could weigh on capital. This, coupled with more stringent capital regulation, could encourage banks to make greater use of tools such as residential mortgage-backed securities (RMBS) and significant risk transfers (SRTs) to relieve pressure on capital ratios, or to adjust their dividend payouts,” Fitch remarked.

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The official launch took place on February 7 at the Grand Egyptian Museum, attended by Prime Minister Mostafa Madbouly, Minister of Planning and Economic Development Rania Al-Mashat, key members of the entrepreneurial ministerial group, the governor of Giza, ambassadors, and various stakeholders from the startup ecosystem and venture capital funds.

“The Startup Charter represents a strategic framework to enhance the capabilities of startups and the entrepreneurial ecosystem, aiming for rapid, sustainable economic growth driven by competitiveness and innovation, while also contributing to job creation. The initiative follows over a year of consultations involving 15 national entities and more than 250 representatives from the startup ecosystem, entrepreneurs, and parliamentary bodies,” according to an official statement from the Egyptian Cabinet. As outlined by the “Ministerial Group for Entrepreneurship,” the charter is designed to support up to 5,000 startups, generate an estimated 500,000 direct and indirect jobs, and accelerate international expansion.

Egypt’s startup ecosystem has gained significant traction in recent years, with ventures attracting USD 228 million in venture capital and debt financing during the first five months of 2025 alone, marking a notable increase from the 2024 situation. Official figures indicate that total funding for the sector reached USD 614 million in 2025, a sign of growing investor confidence and a more diverse financing landscape.

The charter has set out several key objectives over the next five years, including accelerating startup expansion into international markets, developing local talent to combat brain drain, promoting venture capital, and attracting investments through a unified financing initiative. It also seeks to connect critical challenges in various sectors with innovative solutions from startups.

While describing the reform as the first step toward modernising Egypt’s policies and legislation to better support startups, Al-Mashat further emphasised that the charter is not just a theoretical document but a practical and adaptable tool that will evolve to meet technological advancements and market needs. She further highlighted that the priorities of the charter were determined after extensive consultations with key stakeholders, aiming to create a dynamic and sustainable business environment that fosters innovation and attracts investment.

One key feature of the “Startup Charter” is the introduction of a unified definition of startups, newly established companies with a focus on rapid growth, flexibility, and innovation. This definition will allow startups to access a range of incentives and benefits, including official classification certifications from small and medium enterprise authorities.

“Additionally, it includes a unified financing initiative designed to coordinate available funding resources from government entities. The initiative aims to amplify the impact of these resources by up to four times, to mobilise USD 1 billion over the next five years through government-backed guarantees, joint investments with venture capital funds, and collaboration with private-sector investors,” Arab News reported.

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The performance underscores Egypt’s relative resilience at a time when FDI inflow into Africa has normalised following an unusually strong 2024, which UNCTAD said was inflated by a single large project. As a result, the 2025 data reflects a return to more typical investment levels across the continent.

“Among African economies, inflows to Angola reached an estimated USD 3 billion, marking a return to positive values after nine consecutive years of net divestments. Egypt, with inflows of USD 11 billion, remained the largest FDI host country in Africa,” the report stated.

While Egypt solidified its position as Africa’s leading FDI host, other notable performers on the continent included Mozambique, where inflows surged 80% to USD 6 billion, driven by renewed activity in major liquified natural gas projects. Angola too saw a positive shift, recording an estimated USD 3 billion in FDI after nine consecutive years of net divestments.

As per UNCTAD, Egypt’s strength extended beyond headline inflows, with the country also contributing to an increase in greenfield investment activity across Africa. While the number of greenfield projects fell globally and across lower-income economies, Africa recorded a 5% increase in project numbers in 2025, supported in part by growth in Egypt and Côte d’Ivoire.

“Globally, FDI flows rose by 14% in 2025 to approximately USD 1.6 trillion, though growth was heavily concentrated in developed economies, which saw a 43% increase. In contrast, flows to developing economies declined by 2%, with the least developed countries particularly affected; three-quarters experienced stagnant or falling investment,” reported the Arab News.

The report highlighted that new project announcements remained weak globally amid elevated policy uncertainty, with international project finance declining for the fourth consecutive year.

Looking ahead, UNCTAD sees geopolitical tensions, regional conflicts and economic fragmentation continuing to suppress real investment activity in 2026, even as financing conditions are expected to ease. For Africa, sustaining steady FDI inflows will require navigating persistent challenges such as financing constraints, risk perceptions, and structural vulnerabilities.

The post Egypt defies Africa’s low FDI trend with inflows worth USD 11 billion in 2025 appeared first on International Finance.

The lender stated that the funds will be released under the bank’s Public Resources for Inclusive Development – Multiphase Programmatic Approach (PRID-MPA), which could provide up to USD 1.35 billion in total financing, according to The Dawn.

“Around USD 600 million of this will be allocated to federal programmes, while USD 100 million will be allocated to a provincial programme in Sindh,” the media outlet stated.

The approval comes after a World Bank grant of USD 47.9 million in August 2025 to enhance primary education in Pakistan’s Punjab province.

In a separate statement, the lender quoted Bolormaa Amgaabazar, the World Bank’s country director for Pakistan, as saying, “Pakistan’s pathway to inclusive, sustainable growth lies in mobilising more domestic resources and applying them efficiently and transparently to deliver results for people.”

She stated that the MPA enables the bank to work with the federal and Sindh governments to “deliver on impact-more reliable budgeting for schools and clinics, fairer taxation, and better data for decision-making, all while protecting priority social and climate investments, and building public trust.”

Tobias Akhtar Haque, World Bank lead country economist for Pakistan, added that “strengthening the fiscal foundations was key to restoring macroeconomic stability, delivering results, and strengthening institutions.”

“Through the PRID-MPA, we are launching a coherent nationwide approach to support reforms that expand fiscal space, bolster investments in human capital and climate resilience, and strengthen revenue administration, budget execution, and statistical systems,” the official added.

“These reforms will ensure that resources reach the front line and deliver better outcomes for people across Pakistan with greater efficiency and accountability,” he concluded.

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Yet, as 2025 unfolds, severe challenges rooted in the plunging price of oil have prompted sweeping spending cuts across the PIF’s portfolio. These austerity measures are reverberating far beyond the Kingdom’s borders, impacting international companies, migrant workers, and the course of several mega-projects branded as central to Saudi Arabia’s future.

Scope and ambition of PIF

Founded in 1971, the PIF has grown into the world’s sixth-largest sovereign wealth fund, swelling fivefold since 2016 to reach $941 billion by 2024, with a vision to surpass $1.1 trillion in assets under management by the end of 2025 and $2 trillion by 2030. The PIF has become synonymous with scale, ambition, and rapid national transformation.

The PIF’s reach is vast, as it has four international offices, over 2,500 employees, and approximately 170 subsidiaries. The fund’s global investment strategy is unmistakable, with sizeable stakes in some of the world’s most prominent companies such as Meta (Facebook), Disney, BP, Boeing, Uber, and Citigroup, to name a few. Sector-wise, energy claims the largest share of its portfolio (23%), followed by property (17%), IT (9%), and financial and communications services (7% each).

Equally ambitious are the domestic “giga-projects” championed by the PIF. Chief among them are NEOM (a $500 billion utopian city, planned to span 10,000 square miles) and the Red Sea Global (a luxury tourism initiative aiming to bring 19 million visitors to Saudi Arabia each year). Moreover, there are new entertainment cities, airports, transport networks, and sports ventures, including major international events that are part of the Kingdom’s reimagined future.

But the PIF’s ambitions extend beyond infrastructure, as its investments have generated more than a million jobs in three years and helped seed nearly 50 companies across 13 sectors. The PIF’s transformative importance across the Saudi economy and for entire supply chains spanning the globe is difficult to overstate.

Falling oil prices

At the heart of the PIF’s sudden retrenchment is a precipitous and persistent decline in global oil prices. According to the International Monetary Fund (IMF), Saudi Arabia needs oil to trade at $91 per barrel to balance its national budget. Yet, since August 2022, crude prices have stubbornly remained below that threshold, at times plunging far lower.

During Easter 2025, Brent crude hovered below $67 a barrel, while the US benchmark, West Texas Intermediate, slumped to under $64. By May, the decline was starker, as Brent fell to $61.63 and WTI to $58.56, both roughly 30% below their respective 12-month highs.

For Saudi Arabia, this price reality is deeply problematic. Oil revenues are the lifeblood of the national budget and, in turn, the financial ecosystem that sustains the Kingdom’s massive diversification initiatives.

The paradox is striking. Saudi Arabia must use oil money to reduce its dependency on oil. Without robust market prices, the ability to finance “post-oil” projects shrinks, creating a dangerous funding squeeze at the very moment when economic diversification is most needed.

Sweeping austerity

Faced with shrinking income, the PIF, led by Crown Prince Mohammed bin Salman, has undertaken dramatic belt-tightening. In the first half of 2024, the PIF was the world’s highest-spending state-owned investor, but by spring, it ordered spending cuts of at least 20% across controllable portfolios. In some high-profile cases, budgets have been slashed by as much as 60%.

The most visible impact is on the five flagship giga-projects, many of which serve as the poster children of Vision 2030. The scale and ambitions of the $500 billion city, NEOM, have been reduced, with the initial construction phase of its centrepiece, ‘The Line,’ now curbed from 170 kilometres to just 5 kilometres by 2030.

Additionally, a $5 billion NEOM contract was abruptly cancelled days before signing. The Red Sea Global and other major developments have faced similar delays, cost overruns, and financial uncertainty.

The effects ripple into the operational realities of hundreds of subsidiaries, ranging from the nascent Riyadh Air to marquee overseas holdings like Newcastle United Football Club. These measures have affected operations across the board, disrupting staffing, project schedules, and ongoing initiatives.

The impact has been extensive, affecting staffing, delaying projects, and disrupting ongoing operations. Restrained spending has even driven some international contractors out of the Saudi market, their confidence shaken by prolonged payment delays and mounting financial risks.

The labour fallout

Saudi Arabia’s economic retrenchment does not happen in a vacuum. More than 13 million foreign workers, mainly from the Middle East and South Asia, reside in the Kingdom, contributing labour that powers Saudi construction, infrastructure, hospitality, and services.

Over the past two years alone, nearly two million expatriates joined the Saudi workforce as the construction sector more than doubled in size. These workers, in turn, send critical income back to their home countries as remittances, sustaining their families and local economies.

Yet, as the brakes hit on spending, these workers are the first casualties. Recruiters report that expatriates are now seeking jobs elsewhere in the region, even if it means lower pay or shifts to riskier markets.

Meanwhile, large international engineering and construction conglomerates, confronted with unpaid invoices and stalled projects, have begun scaling back or withdrawing operations from the Saudi market altogether. One major European contractor reportedly cited an $800 million debt owed by Saudi clients as a catalyst for its pullout.

The national budget

The knock-on effect of low oil prices extends all the way to Saudi Aramco, the national oil company and the world’s preeminent crude exporter. As oil revenue slid, Aramco was forced to cut its 2025 dividend forecast by almost one-third, from previous highs down to $84.5 billion.

Since the PIF owns a 16% stake in Aramco, the dip translates directly to a loss of at least $6 billion in anticipated earnings for the Fund. It’s a sharp contraction that exacerbates deficits throughout the Kingdom’s public finances and development ecosystem.

The pressures on the national budget are compounded further by international obligations tied to high-profile global events. Hosting the 2029 Asian Winter Games, Expo 2030, and the 2034 FIFA World Cup anchors Saudi Arabia’s ambitions on the world stage but also places heavy demands on the Kingdom’s fiscal resources at a moment of retrenchment.

With oil revenues diminished and budget cuts biting, the PIF has begun pursuing alternative financing to sustain its investment programme and support its social and economic mandate.

The PIF tried to tap into the bond market in January 2025 by floating $4 billion in bonds. It was a sale that was four times oversubscribed. Additional sukuk (Islamic bonds) raised $1.25 billion later that spring, drawing significant investor interest and alleviating some concerns about the stability of PIF-funded projects. Credit spreads offered were intentionally attractive, ranging from 95 to 110 basis points above comparable United States Treasury bonds.

Foreign partnerships have also become a prominent part of the PIF’s new strategy. In March, it signed a landmark memorandum of understanding (MoU) with Goldman Sachs to create investment funds targeting Saudi Arabia and the wider Gulf.

Agreements with Japanese financial institutions such as Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Financial Group promise up to $51 billion in fresh capital to back local market initiatives. Italian agency Sace added $3 billion more to foster cooperation with Italian companies active with PIF portfolio firms.

These moves aim to counter a worrying trend. Inbound foreign direct investment (FDI) into Saudi Arabia fell by 21% year-on-year in the third quarter of 2024, as reported by the Kingdom’s General Statistics Authority.

The government and PIF hope that more favourable financing terms, international partnerships, and continued global enthusiasm for the Kingdom’s long-term prospects will reinvigorate investment.

Are mega-projects losing steam?

The message behind the PIF’s current strategy shift is clear. The Kingdom is prioritising its energy on what works. Several large-scale schemes may be re-evaluated, deferred, or even cancelled due to strained finances.

Massive undertakings are being shelved or redesigned to adapt to new economic realities and budget approvals. Realistically, only projects with more immediate economic returns or those already furthest along will likely secure the funding they need for timely completion.

Beyond budget pressures, the very scale and complexity of the giga-projects carry inherent risks. As experts and stakeholders are fond of noting, “Giga-projects are scaling too quickly without long-term planning or clear strategy.”

The financial and managerial complexity involved, combined with shifting economic winds, exposes Saudi Arabia to mounting challenges and questions about its capacity to deliver all that has been promised.

Saudi Arabia is undergoing a massive political, cultural, and economic metamorphosis. There have been great gains so far, such as reducing unemployment to historic lows, increasing participation of women in the workforce, strengthening tourism footfall, and rebranding the Saudi image. Yet there are setbacks, more economic than political or social, with multiple ambitious giga-projects stretching the administration’s focus and coffers thin.

The global ripples caused by recent budgetary cuts in Saudi Arabia go well beyond the Arabian Peninsula. They are a reminder of how deeply integrated modern economies have become, how vulnerable ambitious transformation schemes are to commodity price shocks, and how dependent grand visions, no matter how well-financed, ultimately are on the realities of sustained revenue streams.

Yet, even amid sharp cutbacks, the scale of Saudi Arabia’s ambition remains remarkable. The PIF is learning to adapt in a new environment, reaching for international financing, tightening its project portfolio, and recalibrating the pace of its grand design for the Kingdom’s economic rebirth.

Saudi Arabia’s PIF remains a central driver of the Kingdom’s economic transformation, even as falling oil prices force difficult decisions. Spending cuts, project delays, and a shift in priorities reflect the new financial reality, but they also show the PIF’s ability to adapt. While some mega-projects may be scaled back or postponed, PIF is pursuing alternative financing and more focused investments to keep Vision 2030 on track.

The impact of these changes reaches far beyond Saudi Arabia, influencing workers, companies, and supply chains worldwide, and while setbacks may occur, the Kingdom’s long-term ambitions remain intact, testing the PIF’s resilience and its ability to shape the country’s economic future in ways that will matter to partners, investors, and the global economy as a whole.

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Franchising offers grassroots entrepreneurs a chance to get into business for themselves. The business model combines a potent mix of capital, brand, and initiative. On the other hand, the cost of getting into a franchise business has risen steeply in recent years.

“A new concept, which started in less developed countries where it has helped to lift millions out of poverty, is microfranchising. Microfranchising is a business model that applies traditional franchising to very small businesses. It is a systemised approach to replicating micro-enterprises like drive-in coffee kiosks, mall products and services, food stands, and just about any other type of business that sells low-cost products or services, primarily in high-traffic areas,” mentions Levi King, CEO, co-founder, and chairman of Nav.com.

How Microfranchising Works
Microfranchising follows the same general idea as traditional franchising, but is intentionally smaller and easier to manage. Instead of opening a full storefront or hiring a big team, owners typically handle compact operations, like mobile services, small retail setups, or simplified service models. The franchisor provides the essentials: training, branding, operational systems, and guidance. The relationship is straightforward and built around a model that’s already been tested in the real world.

Advantages Of Franchising
What draws many people to microfranchising is the comfort of structure. You’re not forced to guess your way through marketing or operations because most of the decisions are already mapped out. You step into a brand that has a track record instead of trying to get a new concept off the ground.

Low Barrier To Entry
Traditional franchises often require heavy capital, which can shut out a lot of capable people. Microfranchises remove that barrier. The startup cost is significantly lower, and the operating model is lean. This allows people with limited funds to take their first step into business ownership without putting themselves under enormous financial strain.

Financing Your Franchise
Because microfranchises are smaller and based on proven systems, financing is often more accessible, and some franchisors offer internal financing or connect franchisees with microloan programmes or small-business lenders.

Social And Community Impact
Beyond individual success stories, microfranchising can serve a social and community impact, helping local economies, providing jobs, and offering necessary services in areas where there are few other choices. The model offers a balance of personal development and community benefit for those interested in running a business that also benefits the community around them.

The post Five reasons why businesses should consider microfranchise model appeared first on International Finance.