Document background
The Staff Loan Agreement is a essential document used when an employer in Saudi Arabia provides financial assistance to employees through a formal lending arrangement. This agreement is particularly relevant when organizations offer employee benefits in the form of personal loans, housing assistance, or other financial support. The document must comply with Saudi Arabian labor laws, banking regulations, and crucially, Islamic finance principles that prohibit conventional interest (riba). The Staff Loan Agreement typically includes detailed terms for loan disbursement, repayment through salary deductions, provisions for employment termination, and default scenarios. It serves as a legal safeguard for both employer and employee, ensuring transparency and enforceability while maintaining Sharia compliance. The agreement is commonly used across various industries where employers provide financial benefits as part of their employee retention and welfare programs.
