Kafalah program for SMEs signs agreement with Saudi Finance Company

Kafalah, the Saudi SMEs loan guarantee program, has so far signed deals with five major financing institutions. (SPA)
Updated 29 March 2019

Kafalah program for SMEs signs agreement with Saudi Finance Company

  • The Saudi SMEs loan guarantee program has so far signed deals with five major financing institutions
  • The Kafalah program is also giving special attention to helping women in business

RIYADH: As part of its initiative to encourage financial institutions to invest in a greater number of small and medium enterprises (SMEs), the Kafalah program has signed an agreement with Saudi Finance Company.

In its efforts to help achieve the Vision 2030 objective for SMEs to contribute 35 percent of the nation’s gross domestic product, Kafalah, the Saudi SMEs loan guarantee program, has so far signed deals with five major financing institutions, in addition to all Saudi banks and Emirates Bank.

The program — the name of which comes from an Arabic word that means a guarantee or formal assurance that certain conditions will be fulfilled relating to a product, service or transaction — offers help to entrepreneurs to launch or grow their businesses. First they submit a financing request to one of the institutions that partners with Kafalah. If the lender needs guarantees to cover the risks associated with lending to new or developing businesses, it can request such a guarantees from the program.

If the program approves the request, it selects one of four specially designed products to meet the needs of the institution and the entrepreneur.

One of its products is designed for start-ups, offering extended support to build a strategic relationship with the General Authority for Small and Medium Enterprises and help meet their funding needs during  early growth.

The Kafalah program is also giving special attention to helping women in business; by the end of 2017, businesswomen accounted for 5 percent of the work of the program. To help achieve Vision 2030’s objective to empower businesswomen and encourage their increased participation in SMEs, the program offers preferential benefits to enterprises that are at least 50 percent owned by women.

A recent Kafalah report revealed that between the launch of the program in 2006 and the end of 2018 24,268 guarantees were issued for 6,291 establishments, worth almost SR 13.5 billion ($3.6 billion) and covering total financing worth SR 25.6 billion.

The program aims to support all types of businesses in diverse sectors such as tourism, entertainment, manufacturing, services, trading and agriculture. The construction sector is the largest single beneficiary, with 5,300 requests since 2006, followed by trading. The report also revealed that in terms of geography, the highest number of requests came from businesses in Riyadh, followed by the Eastern Region.

In 2018, Kafalah achieved a growth rate of 64 percent in the value of guarantees and 47 percent in the total amount of financing, compared with 2017.


Leading figures to talk world’s future at Saudi forum

Updated 7 min 51 sec ago

Leading figures to talk world’s future at Saudi forum

  • The event comes as part of the international conferences program held during the G20 Saudi Presidency

RIYADH: Renowned speakers will discuss the world’s future on Nov. 8 and 9 at the International Conference on Giftedness and Creativity.

The event is organized by the King Abdul Aziz and His Companions Foundation for Giftedness and Creativity (Mawhiba), and the G20 Saudi Secretariat.

The event comes as part of the international conferences program held during the G20 Saudi Presidency, and will be held under the patronage of King Salman and inaugurated by Riyadh Gov. Prince Faisal bin Bandar bin Abdul Aziz.

The two-day conference consists of four dialogue sessions, with two each day. The central high-level inaugural session is titled: “Imagine the Future: Empowerment of Youth to Shape New Future Horizons,” and will feature Minister of Energy Prince Abdul Aziz bin Salman, Minister of Education Dr. Hamad Al-Asheikh, and Henrietta Fore, UNICEF executive director.

The conference will also include three keynote speakers: Michio Kaku, US theoretical physicist, futurist and science communicator; Neil deGrasse Tyson, US astrophysicist, cosmologist, planetary scientist and science communicator; and Gerd Leonhard, a futurist and author specialized in the interaction between humans and technology.

The first day concludes its activities with a second dialogue session titled “The Digital World – How will it change the identity of the future?” with Dr. Abdullah Al-Ghamdi, chairman of the Saudi Data and Artificial Intelligence Authority; Eng. Nadhmi Al-Nasr, CEO of NEOM; Anthony Salcito, vice-president of worldwide education at Microsoft; and Hong-Eng Koh, global chief government industry scientist at Huawei.

The second day of the conference begins with a session titled “The Future of Innovation and Entrepreneurship.” The list of panelists includes Jonas Kjellberg, co-founder of Skype; Adam Cheyer, co-founder of Siri Inc. and formerly a director of engineering in the iPhone group at Apple; Dr. Esther Wojcicki, vice chair of the Creative Commons advisory council and Andreas Weigend, former chief scientist of Amazon.com.

The second day’s second session is titled “Global Visions – How they shape the future of humanity?” It will feature Sally Krisel, former president of the US National Association for Gifted Children; Lianne Hoogeveen, president of the European Council for High Ability; Noriah Ishak, former president of the Malaysian National Gifted Center; and Andreas Schleicher, director for the Directorate of Education and Skills at the Organization for Economic Cooperation and Development.

Mawhiba is the leading international establishment in the field of discovering, adopting and empowering talents, and it has discovered more than 161,000 talented Saudi students and expanded its work overseas.

It has achieved international successes by achieving 339 international victories in worldwide scientific competitions.

Mawhiba is aware that moving towards an economy independent of oil requires raising a generation capable of finding solutions to the problems of the future. The establishment has developed its methods based on the latest scientific means and practices to invest in the potential of talented individuals and empower them.