Unprecedented Growth In Facilities For SMEs Marks A Milestone In Economic Expansion

Riyadh, Saudi Arabia: Saudi Arabia has experienced a remarkable 269% increase in facilities during the third quarter. This surge is emblematic of the nation's aggressive economic expansion and the buoyant rise in business activities across the region.

Bank and financing facilities provided to these burgeoning enterprises have soared to an impressive SAR 21.8 billion ($5.81 billion) in Q3, compared to SAR 5.9 billion ($1.57 billion) during the same period in the previous year. This significant leap reflects the robust mechanisms in place to support SMEs, which are pivotal in driving the country’s economic growth.

According to a financial analysis report by Al Eqtisadiah, drawing on data from the Saudi Central Bank – SAMA, outstanding facilities for SMEs reached a new high of SAR 329.2 billion ($87.79 billion), marking a 23% year-on-year growth. The analysis further highlights growth rates segmented by enterprise size, with micro-enterprises seeing a 50% increase, small enterprises a 30% rise, and medium enterprises a 14% growth. Notably, the facilities granted to SMEs now make up 9.3% of the total facilities provided by banks and financing companies, up from 8.7% in the same period last year.

Central to this development is the "Kafalah" Program, established in 2004, which has been instrumental in providing financing guarantees worth SAR 100 billion ($26.67 billion) to over 23,000 businesses as of September. This program has been vital in empowering entrepreneurs and fostering a thriving SME sector across Saudi Arabia.

The facilities provided target specific segments, including post-startup companies with a proven business model and initial revenue generation, self-funded companies seeking expansion financing, and growth companies looking to scale operations or explore new markets.

Programs like "Kafalah" and a variety of banking facilities are crucial enablers for these businesses, fostering their expansion and contributing significantly to the goals of Saudi Arabia's Vision 2030. By strengthening the national economy and enhancing its income diversity, these initiatives nurture a vibrant entrepreneurial ecosystem, securing a prosperous future for Saudi enterprises.