DAMMAM: The Small and Medium Enterprises General Authority (Monshaat) has stressed its keenness to support small and medium enterprises (SMEs) through initiatives, programs, and activities, including consulting, follow-up, training and awareness-raising, the Saudi Press Agency (SPA) reported on Thursday.
Monshaat is set to launch a bank for SMEs and establish an electronic link between SMEs, the authority and funding agencies, in addition to allocating funds to achieve the principle of sponsorship adopted by the government program Kafalah.
This came on Wednesday during the workshop organized by the Eastern Province Chamber of Commerce and Industry. This workshop, held at the chamber’s headquarters in Dammam, was attended by Monshaat’s Director of Corporate Finance Badr Al-Radhan and the representative of Kafalah, Mohammed Al-Khuwaiter.
Al-Radhan said that Monshaat had adopted many initiatives worth about SR12 billion ($3.2 billion). These include venture capitals, indirect loans, recovery of government fees, and the enhancement of the Kafalah Program.
He pointed out that 21 deals worth SR2.8 billion were concluded under these programs, with the amounts approved for investment by Monshaat exceeding SR1 billion.
Al-Radhan added that the targeted sectors were the well-known economic activities, most notably agriculture, accommodation and catering services, administrative and support services, transport and storage, real estate, education, health, manufacturing, arts and entertainment, information and communications, and others.
He stressed that Monshaat was in the process of evaluating its performance while taking into account several indicators, including the percentage of loan utilization for the target sectors.
Al-Radhan spoke about the SME bank that Monshaat is set up to launch, highlighting that this initiative aims to improve access to funding and empower key financial institutions to provide more funding, support Vision 2030, and contribute to the financial sector development plan. He referred to the cooperation between Monshaat and 35 governmental and non-governmental bodies to inform beneficiaries of financing options for entrepreneurs, and mechanisms to benefit from them.
Al-Khuwaiter said that the Kafalah program, founded in 2006 as a joint development initiative between the Ministry of Finance and Saudi commercial banks to help overcome SME financing constraints, covered the guarantee of a percentage of the risk in the event of a sponsored activity’s failure to repay part or all of its funds.
He emphasized that the program has partnerships with 30 bodies, including 26 banks and financing institutions, and four government agencies.
Al-Khuwaiter added that until the third quarter of this year, Kafalah had sponsored 7,321 establishments, which received about SR30.9 million, with guarantees issued by the program reaching SR16.9 billion.