RIYADH: Saudi Arabia’s small and medium enterprise landscape saw a 2.6 percent uptick in the second quarter of 2023, with the number of SMEs reaching 1.23 million, up from 1.2 million in the first quarter, according to official data.  

Riyadh emerged as the hub for 42.3 percent of the SMEs by the end of the second quarter, the latest report released by the Small and Medium Enterprises General Authority, Monsha’at, showed.  

The Makkah region and the Eastern Province followed with 18.6 percent and 10.9 percent, respectively. The Aseer Province hosted 5.3 percent of the SMEs, while other cities collectively accounted for 22.9 percent of the total. 

The report provided a breakdown of Saudi Arabia’s SME ecosystem, revealing the presence of 17,888 medium-sized companies, 152,825 small-sized establishments, and 1.06 million micro-sized firms. 

In terms of specific regions, the Riyadh province housed 518,516 SMEs by the second quarter’s conclusion, while the Eastern Province hosted 228,337. Aseer region’s contribution stood at 64,440 SMEs. 

Hashim Al-Dabbagh, acting CEO of Aseer Development Authority, attributed the sector’s growth to Saudi Arabia’s investor-friendly environment. He added: “Our nation’s advanced regulatory and legislative environment has helped to establish an investor base that believes in Saudi Arabia’s economic direction, which has resulted in unprecedented growth in the volume and quality of startup deals.” 

Promoting the SME sector aligns with Saudi Arabia’s Vision 2030 goals. The vision aims for SMEs to contribute 35 percent of the gross domestic product by 2030, with a significant role in reducing the unemployment rate from 11.6 percent to 7 percent and increasing women’s workforce participation from 22 percent to 30 percent. 

Amid a decline in venture capital funding in the Middle East and North Africa region during the second quarter of 2023, Saudi Arabia maintained its leadership, raising $446 million in the first half of the year, the report outlined.

It further noted that 42 percent of all MENA funding to SMEs during the first half of 2023 was directed to Saudi Arabia. 

Al-Dabbagh emphasized the collaboration between the public and private sectors, contributing to Saudi Arabia’s pursuit of its Vision 2030 goals.  

He added: “When combined with enabling factors such as the strong collaboration between the public and private sectors, the positive growth trajectory of Saudi Arabia’s entrepreneurs and smaller businesses is providing crucial momentum to the Kingdom’s progress toward its ambitious Vision 2030 goals.”