RIYADH: Saudi Arabia’s program to support small and medium enterprises, Kafalah, allocated SR12.1 billion ($3.22 billion) to support 5,476 initiatives as of December 2023.
The SMEs received funding exceeding SR15.6 billion, with the program granting guarantees for 7,178 financing requests during 2023. The initiative prioritized delivering support to enterprises across various regions of the Kingdom, the Saudi Press Agency reported.
Multiple areas have shown notable growth in guarantee values for promising regions, such as Asir with 66 percent, Al-Jouf with 45 percent, and Tabuk with 42 percent.
The collaboration with various government entities played a crucial role in supporting SMEs throughout 2023, as reported by SPA.
The Kafalah program facilitates SMEs in accessing essential financing for expansion, attracting new owners unfamiliar with dealing with financial agencies for development.
The program highlighted its commitment to supporting female entrepreneurs by activating their leadership roles in the workforce and national economy, as well as encouraging and supporting qualified businesswomen through preferential benefits and specialized training programs.
In 2023, 1,076 businesswomen benefited from the program with guarantees exceeding SR1.7 billion.
The effectiveness of the program was evident in the growth of enterprises and the total number of employees, which increased by 20 percent within six months of securing guaranteed financing.
This growth was attributed to a 7 percent increase in the employment of Saudi males and a 9 percent increase in Saudi female employment one year after obtaining Kafalah guarantees, with the impact reaching 17 percent after two years.
According to data from the Saudi Central Bank, the contribution of the Kafalah financing guarantee program to supporting SMEs increased from 4.9 percent in the second quarter of 2018 to 12.2 percent by the end of the third quarter of 2023, totaling SR32.6 billion in financing for the sector.
The initiative received several awards, including the Best Guaranteed Financing Program for Small and Medium Enterprises in the Middle East and the Best Program for Supporting and Empowering Businesswomen.
The Guaranteed Financing Program, launched in 2020 by SAMA in cooperation with Kafalah, guarantees 95 percent of the value of financing granted by banks and companies according to the approved mechanisms within the program, with the aim of providing additional support and enhancing the creditworthiness of micro-enterprises.
