RIYADH: More than 100 small and medium sized businesses in the tourism and entertainment industry recently received guarantees to the tune of SR 66.9 million from the Kafala program.
Kafala is a joint venture between the Ministry of Finance, which is represented by the Saudi Industrial Development Fund (SIDF), and Saudi banks with the objective of funding small and medium sized enterprises in the Kingdom.
Gen. Ali bin Abdullah Al-Aid, SIDF director, said participating banks have already provided SR 132.6 million to fund 65 businesses in tourism and entertainment.
He said SIDF guarantees loans to tourism and entertainment activities up to 80 percent of the total value of finance, where each guarantee is worth SR 1.6 million.
The tourism and travel sector accounts for 44 percent of total guarantees followed by restaurants and cafes at 32 percent. The entertainment and leisure sector accounts for 22 percent and the hospitality sector the remaining 2 percent.
The Riyadh region obtained the largest number of guarantees accounting for 39 businesses receiving a total of SR 26.1 million. Makkah received SR 14.9 million, the Eastern Province SR 12.4 million, Qasim SR 3.4 million and Madinah SR 2.8 million.
Al-Aid said: “The tourism and entertainment industry is considered the most important business sector within the Kafala Program’s small and medium sized business projects.” SIDF signed a joint cooperation deal with Saudi Commission for Tourism and Antiquities for the provision of financial assistance to owners of tourist and entertainment projects.
Banks offer finance up to SR 2 million and the Kafala Program issues a guarantee to the bank to cover up to 80 percent of the required financing.
The role of the program is not just limited to the issuance of guarantees but includes training and awareness workshops for young entrepreneurs in cooperation with the World Bank, the Institute of Banking and Saudi chambers of commerce and industry.
Kafala approves SR 66.9 million in business guarantees
