Saudi Awwal Bank (SAB) and United Pharmaceuticals, a retail pharmacy chain in Saudi Arabia, have successfully completed the first off-balance sheet end-to-end digital Islamic supply chain finance transaction in the Kingdom. This groundbreaking achievement in Islamic finance enables automated early payments for United Pharmaceuticals’ strategic suppliers, marking a significant step in the integration of technology with Shariah-compliant finance.
Recently, SAB upgraded its supply chain platform to incorporate Shariah-compliant features, enabling United Pharmaceuticals to upload payment files seamlessly. The upgrade included fully automated processes for recording, approval, and sales contract generation, all in line with Islamic finance principles. This enhanced system drastically reduces manual processing time from hours to minutes, improving operational efficiency for United Pharmaceuticals.
The new digital solution offers numerous benefits to the company, including better control and efficiency in supplier invoice processing and payments, reduced operational risks, stronger supplier relationships through timely payments, optimized working capital management, and extended payment terms through non-recourse early discounting based on the buyer’s creditworthiness. It also offers improved pricing for suppliers.
Yasser Al-Barrak, SAB’s Chief Corporate and Institutional Banking Officer, expressed pride in leading the way with innovative solutions that align with Islamic principles and support Saudi Vision 2030. “The integration of technology and Islamic finance is a significant step forward in supporting businesses and fostering economic growth in the Kingdom,” he said.
Khaled Yassin, CEO of United Pharmaceuticals, highlighted the strategic importance of this agreement, stating that it would improve liquidity management, operational efficiency, and flexibility to support expansion plans. Dr. Mohamed Abdelwahab El-Mursi, CFO of United Pharmaceuticals, emphasized that the partnership with SAB will reduce operational complexities and enhance payment processes.
This enhancement of SAB’s Islamic supply chain platform underscores the growing importance of digitization in the Kingdom, with the potential to transform Islamic structured trade solutions. SAB remains committed to advancing its platform to deliver effective automated discounting solutions for both Islamic and conventional transactions.
