RIYADH, Feb 04 (Arab News): 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 per cent, Al-Jouf with 45 per cent, and Tabuk with 42 per cent.
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 per cent within six months of securing guaranteed financing.
This growth was attributed to a 7 per cent increase in the employment of Saudi males and a 9 per cent increase in Saudi female employment one year after obtaining Kafalah guarantees, with the impact reaching 17 per cent 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 per cent in the second quarter of 2018 to 12.2 per cent by the end of the third quarter of 2023.
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