RIYADH: Credit facilities extended to micro, small, and medium enterprises in Saudi Arabia grew by 22.6 percent year on year in the third quarter of 2024, totaling SR329.23 billion ($87.8 billion), according to official data.
The Kingdom’s central bank, known as SAMA, revealed that 94.7 percent of these loans were provided by Saudi banks, while finance companies contributed 5.3 percent.
MSME lending represented 9.1 percent of banks’ total loan portfolios and 18.8 percent of finance companies’ credit portfolios.
The Saudi government has been actively encouraging financial institutions to allocate at least 20 percent of their loan portfolios to this critical sector, reflecting its strong and continued commitment to fostering business growth and economic diversification in line with Vision 2030.
In the third quarter, medium-sized enterprises received the largest share of credit facilities, totalling 55 percent, or SR181.05 billion.
Micro enterprises — those generating up to SR3 million in revenue with a workforce of no more than five employees — saw substantial growth, with credit increasing by 50.4 percent to SR36.14 billion, despite holding a smaller overall share.
Credit to small enterprises, which made up 34 percent of MSME financing, rose by 30.4 percent to SR112.03 billion during the same period.
The growth of SMEs in Saudi Arabia is driven by government-backed initiatives and Saudi Vision 2030’s ambitious reforms.
Key programs include Kafalah for loan guarantees, Tamweel for connecting SMEs with financiers, and the Saudi Venture Capital Co. for startup investments.
The Indirect Lending Initiative also enhances SME financing through intermediaries.
Regulatory advancements, such as the 2015 Companies Law, NIDLP, and the National Center for Privatization, have improved the business environment.
Vision 2030 aims to boost SMEs’ GDP contribution to 35 percent by enhancing productivity, developing skills, improving infrastructure, and supporting sector diversification.
Monsha’at key figures
The Small and Medium Enterprises General Authority, also known as Monsha’at, drives SME growth by improving access to financing through collaborations with financial institutions and initiatives including the Kafalah Program, which is designed to boost lending.
Monsha’at also champions entrepreneurship, supports business development with specialized training programs, and advocates for regulatory enhancements to create a more business-friendly environment.
According to its third-quarter report, Saudi Arabia saw a significant surge in commercial registrations, which grew by 62 percent year on year to 135,909, with 46.8 percent attributed to female-owned businesses.
This momentum points to MSMEs’ growing role as engines of innovation, job creation, and economic diversification, strengthening the foundation for sustainable, long-term growth.
It highlights increasing entrepreneurial activity and business confidence, with more diverse participation across industries.
The rise in female-owned businesses, in particular, reflects the success of government initiatives aimed at empowering women and fostering inclusivity in the economy, a core objective of Vision 2030.
Regionally, Riyadh led with 39 percent of new commercial registrations, totaling 53,150, followed by Makkah with 18 percent, or 24,782, and the Eastern Province with 15 percent, amounting to 19,841.
