More than $4billion was pumped into Saudi Arabian small and medium businesses by the Kingdom's banks to help them get through the height of the pandemic, it has been revealed.
Homma Hashem, general manager of the country's Small and Medium Enterprises Loan Guarantee Program, known as Kafalah, said the size of the lending represented a 106 percent rise on 2019 as firms battled to stay afloat as Covid-19 swept the globe.
Kafala Program is a collaboration between the Ministry of Finance, represented by the Saudi Industrial Development Fund (SIDF) and Saudi banks, which aims to promote financing to SMEs within the Kingdom of Saudi Arabia.
A survey carried out by the Rand Corporation in June 2020 found that 85 percent of SMEs in the region believed that they would not survive 12 months without external support.
Speaking during the first day of the International MENA Guarantee Conference, Hashem set out how the scheme worked to save businesses as the impact of the coronavirus outbreak gripped the region.
He said: "During the pandemic in 2020, and in the midst of the crisis, the demand for guarantees from Kafalah program increased by more than 106 percent from the previous year , and the program was able - with God's Grace - to meet the call and issue the necessary guarantees,"
Hashem added: "The program also expanded the network of success partners from the financing agencies to reach 33 financial institutions licensed by the Saudi Central Bank."
According to the forum, micro, small, and medium enterprises make up 80-90 percent of all regional businesses, and are responsible for 70 percent of regional employment.
The borrowing by SMEs continued to grow in in the first quarter of 2021, figures released by the Saudi Central Bank on Monday revealed.
The statistics showed the total amount of credit awarded to SMEs between the first quarter of 2020 and the first quarter of the current year increased by 39.74 percent.
Kafalah, in partnership with the SME Finance Forum, is holding the conference under the slogan: “The Role of Credit Guarantee Schemes in Rebuilding the SMEs Post-COVID-19,” on September 6 and 7.