Awards for Excellence 2020
A great deal of resources have been dedicated to small and medium enterprises in Saudi Arabia as the kingdom looks to increase SME’s contribution to GDP from 20% to 35% under its Vision 2030 programme.
In Saudi Arabia, 99% of private-sector companies are SMEs, although the sector lags behind regional and global peers in terms of size and value. Saudi SMEs contribute around 20% of GDP compared with 53% in the UAE and 45% on average among countries worldwide, according to research by Castlereagh Associates.
SMEs are expected to play a vital role in diversifying the economy away from oil and to provide employment for Saudi’s young population. In March 2020 the government announced SR50 billion ($13.3 billion) in financial aid for SMEs as the coronavirus downturn impacted economic activity.
With lack of financing the biggest challenge impacting SMEs in the kingdom, the Saudi Industrial Development Fund launched its Kafalah Program, which offers credit guarantees to banks to offer loans to SMEs.
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Tariq Al-Sadhan |
Working with the Kafalah Program, Riyad Bank has been able to increase financing to small and medium enterprises by 45% and 25% respectively in 2019.