RIYADH: Small and medium-sized enterprises in Saudi Arabia received a significant boost as the Kingdom’s SME Bank earmarked more than SR10 billion ($2.66 billion) during the first half of the year, bolstering efforts to diversify the economy and promote entrepreneurship.
The allocated funds are expected to provide much-needed financial impetus to SMEs, enabling them to expand their operations, innovate and contribute to job creation, according to a statement.
This comes as an extension of the effective partnership between the banking sector and investment agencies.
It also falls in line with the government’s efforts to further develop the Kingdom’s SMEs with the aim of enhancing their growth trajectory by providing a package of various financing products and solutions.
In the January-June period, the SME Bank’s financing initiatives, including its dedicated financing portal, channeled over SR2.8 billion to around 720 establishments, of which SR2.5 billion was directed through the portal.
Among the sectors benefiting most were wholesale trade, construction, contracting, and administrative activities, while other sectors such as retail trade, health, and public services also received support.
Moreover, the total funding support facilitated by the Small & Medium Enterprises Loan Guarantee Program, or Kafalah, surged to SR5.6 billion, with 2,839 enterprises benefiting from this initiative. The Saudi Venture Capital Co. engaged with 34 funds, supporting the growth of over 600 establishments.
Through strategic collaborations with diverse financing entities, the SME Bank facilitated SR113 million via co-financing programs and over SR43.5 million through indirect lending channels. Low-cost financing collaborations with financial companies yielded more than SR83 million, while partnerships with fintech firms enabled proxy financing of over SR13 million.
Aligned with the goals of Vision 2030, the Saudi SME sector aims to contribute 35 percent to the gross domestic product by 2030. Additionally, SMEs are anticipated to play a pivotal role in achieving broader objectives, including reducing unemployment rates from 11.6 percent to 7 percent and elevating women’s participation in the workforce from 22 percent to 30 percent.
Source: Arab News