Document background
The Credit Agreement Letter is a fundamental document in Saudi Arabian banking and finance, used to formalize Shariah-compliant financing arrangements between financial institutions and their clients. It serves as an official offer of credit facilities, detailing the terms and conditions under which the financing will be provided. The document must strictly adhere to Islamic finance principles and Saudi Arabian banking regulations, including those set by the Saudi Central Bank (SAMA). This letter format is particularly useful for both individual and corporate financing, providing a more concise alternative to full credit agreements while maintaining legal enforceability. The document typically includes key elements such as facility amount, profit rate structure, payment terms, security requirements, and conditions precedent, all structured in compliance with Islamic finance principles.
