Paper Title
FINANCIAL RESTRICTIONS IN SAUDI ARABIA: AN OVERVIEW

Abstract
Saudi Arabia has been undergoing a significant transformation in its economic and social landscape, spearheaded by Vision 2030, an ambitious national plan aimed at diversifying its economy, reducing reliance on oil revenues, and enhancing competitiveness in global markets. Announced by Crown Prince Mohammed bin Salman, Vision 2030 seeks to modernize various sectors of the Saudi economy, stimulate non-oil industries, and foster private sector growth. Key reforms in privatization, investment promotion, and social development have been undertaken, positioning Saudi Arabia as a hub for innovation and foreign investment. This reform agenda has included social development initiatives focused on education, healthcare, and infrastructure improvements, enhancing the overall quality of life for citizens while building a sustainable and inclusive society. These initiatives are critical in fostering a culture of innovation and supporting the country’s burgeoning young population. However, despite the ambitious strides toward diversification, financial constraints present a formidable challenge to both businesses and households in Saudi Arabia. Limited access to financing, high borrowing costs, and regulatory hurdles restrict businesses' ability to innovate, expand, and adopt new technologies. This hampers competitiveness both domestically and internationally. Financial constraints also extend to households, affecting financial stability through limited access to credit, income volatility, and high indebtedness, which in turn reduces consumption, savings, and investments in human capital. Addressing these financial bottlenecks is essential to realizing the goals of Vision 2030, as emphasized by several scholars including Al-Saud et al. (2023) and Al-Ghamdi and Al-Majid (2021), who highlight the need for targeted policies to improve financial access and foster a supportive environment for entrepreneurial activity and sustainable economic growth. The primary objective of this theoretical research is to examine the conceptual underpinnings of financial constraints in the Saudi Arabian context and analyze their implications for businesses, households, and the broader economy. This study aims to develop a comprehensive conceptual framework to understand the nature and determinants of financial constraints, considering factors such as access to finance, credit conditions, regulatory environments, and institutional support. Additionally, it evaluates the impact of financial constraints on business growth, innovation, household financial stability, and overall economic development, offering policy recommendations to mitigate these constraints and foster a conducive environment for inclusive financial systems. The study draws on a broad body of literature from economics, finance, and behavioral studies to explore the theoretical foundations of financial constraints. Research on financial constraints in emerging economies has highlighted the critical role of access to credit, borrowing costs, and regulatory barriers in shaping firm performance and economic growth. Within the Saudi Arabian context, the literature has also explored the role of banking sector development, digital financial services, and regulatory reforms in expanding financial inclusion, particularly for underserved populations such as small and medium-sized enterprises (SMEs) and low-income households. Studies have also examined the effectiveness of microfinance, informal savings mechanisms, and community-based financial practices in promoting access to finance and enhancing financial resilience, particularly in resource-constrained settings. This research contributes to the broader literature on financial economics and business studies, offering insights for policymakers and future empirical investigations. The scope of this theoretical study does not include empirical data collection but offers a comprehensive analysis of existing studies to provide a solid foundation for future research and policy development. By identifying the key constraints to financial access in Saudi Arabia and evaluating their impact on the economy, this study provides crucial policy implications for fostering an inclusive, innovative, and resilient financial ecosystem. This, in turn, will support Saudi Arabia’s broader economic goals under Vision 2030, ensuring sustainable growth and long-term prosperity for the nation.