A memorandum of understanding (MoU), described as an important milestone set for Saudi Arabia in the field of risk management, was signed Sunday between Kafalah and Tawuniya Insurance Company, which will provide strong support to the SME sector and the county’s economy.

The deal, claimed to be the first of its kind in the Kingdom for providing insurance protection covering the small and medium enterprises overseen within Kafalah’s program, will facilitate and speed up the process in which the SMEs will acquire support through minimizing their risks by proper insurance.

This MoU also represents a breakthrough in creating mechanisms for sharing and analyzing statistics and data, which plays a role in facilitating the development of the SME sector, particularly with regards to insurance. This allows for the analysis and management of risks facing such enterprises with much greater efficiency. The importance of this sector is demonstrated by the fact that the SMEs represent 90 percent of the total economic enterprises in the Kingdom and accounting for 28 percent of GDP.

The MoU was signed by the Kafalah program Director Osama A. Al-Mubarak and the Tawuniya CEO Raed Abdullah Al-Tamimi at the Tawuniya headquarters in Riyadh.

Al-Mubarak stated that the Kafalah’s role is not purely limited to providing guarantee for the projects funds. “The initiative extends to enhancing integration and cooperation between those entities responsible for supporting the SMEs sector. This occurs through providing the facilities required for success of these entities across the Kingdom, while simplifying processes and offering services, such as providing guidance and young business men training.”

Al-Tamimi expressed his pleasure over signing this MoU which, he said, would play a role in activating mechanisms of support for national projects, while providing Tawuniya’s insurance expertise to SMEs. This will increase their capabilities to control and manage risks effectively.