JEDDAH: Saudi Arabia’s decision to set up a bank dedicated to small and medium-sized enterprises has been welcomed by industry experts in the Kingdom.
The new lender will be called the Bank of Small and Medium Enterprises and was approved by Saudi Arabia's Cabinet on Tuesday, the Saudi Press Agency reported.
“The SMEs Bank brings together all financing solutions under one umbrella to enable the small and medium enterprises sector to access appropriate financing and achieve stability and growth,” the Ministry of Commerce tweeted.
Mohammed Al-Tuwaijri, deputy chairman of the National Development Fund, said the new bank would contribute to the local economy by filling funding gaps, Argaam reported.
Wassim Basrawi, who is CEO at Saudi Aramco’s entrepreneurial arm Wa'ed, said the news confirmed the Kingdom’s ongoing support for the SME ecosystem and recognizing how critical these businesses were to growing and diversifying the economy.
“This is a welcome addition to the Kingdom’s entrepreneurial ecosystem and we’re confident this new initiative will accelerate SME growth, which has been our focus for almost a decade,” he told Arab News. “Wa’ed remains committed to supporting new ideas, solutions and products that fill critical gaps in the Kingdom’s economy.”
According to a new industry survey, Saudi Arabia reported a 35 percent year-on-year increase in the number of investment deals in the technology start-up sector in 2020.
A study by data research platform Magnitt found that, last year, the Kingdom accounted for 18 percent of the 496 investment deals across the Middle East and North Africa.
Figures released by the Saudi Central Bank in late January showed that, in the third quarter of 2020, the total amount of credit awarded to SMEs was SR176.2 billion ($46.99 billion), up from SR115 billion in Q3 2019 and SR106.7 billion in Q3 2018.