The national drive to boost lending activity and facilitate growth among Saudi Arabia’s small and medium enterprises (SMEs) is given extensive coverage in a report recently produced by the global publishing firm, Oxford Business Group (OBG).

Estimates suggest that almost all (90 percent) of Saudi businesses fall into the SME category. However, traditionally, lending to small businesses has accounted for only two percent of the aggregate Saudi loan book, according to figures from the International Finance Corporation.

The Report: Saudi Arabia 2014 puts the spotlight on the country’s Kafala loan guarantee program, which is proving to be a vital conduit between banks and smaller businesses. It also looks in detail at the impact of e-banking and online services as they become more important on the back of growing investment in infrastructure and the widespread adoption of smartphones.

Saudi Hollandi Bank (SHB) signed a first-time memorandum of understanding (MoU) on research with OBG for its latest report on the Kingdom’s economy. Under the MoU, OBG was given access to the lender’s resources, which were used to compile the chapter on banking in the report.

Bernd van Linder, SHB’s CEO, said the Kingdom’s vibrant economy meant that the potential for further expansion across the banking sector remained high.

OBG’s Regional Director for the Middle East Jana Treeck said the group’s latest report had highlighted the move under way in Saudi Arabia to make SMEs a driver of economic growth. “We know that a total of 7,280 loan guarantees worth a combined $957 million were granted under the Kafala initiative between 2006 when it was launched and the end of last year,” she said.

Andrianna Dafnis, country director in Saudi Arabia, added: “We were thrilled to team up with SHB to chart the industry’s performance and look at the role that the Kingdom’s financial institutions.”