RIYADH: In a move to bridge the financing gap in the small and medium enterprises sector, Saudi Arabia’s National Development Fund has announced the start of operations at the Small and Medium Enterprises Bank.
The opening of the new bank will help the SME sector contribute as much as 35 percent to Saudi Arabia’s gross domestic product in line with the Saudi Vision 2030.
Launched in 2021, the bank focuses on providing all its products and services in digital form without the need to establish branches.
In an attempt to create partnerships and further enhance the contribution of financial institutions in terms of financing SMEs, the bank signed a total of 15 cooperation agreements, worth an accumulated SR3 billion ($797 million), with several financial institutions, Alarabiya reported.
Overall, Saudi Arabia is witnessing an acceleration in licensing SME factories while taking advantage of government facilities to stimulate specific sectors and industries related to the fourth industrial revolution.
In November, Saudi Arabia’s cabinet approved the Small and Medium Enterprises Bank System, according to the Saudi Press Agency.
Ministers signed off the transfer of Kafalah SME Loan Guarantee Program from Monsha'at to SME Bank.
This comes as industrial SMEs in Saudi Arabia are urged to transform into resilient and technologically savvy operations in order to go global and be able to compete internationally, according to a report by the multinational professional services network KPMG.
Moreover, the SME sector is perceived as a vital economic engine, a key generator of new employment, and the foundation of the global economy, senior vice president of technical services at Aramco, Ahmad Al Sa’adi said, in an exclusive interview with Arab News earlier.
In addition to this, SMEs are set to play a significant role in achieving Saudi Arabia’s objectives of lowering the unemployment rate from 11.6 percent to 7 percent, and increasing women’s participation in the workforce from 22 percent to 30 percent.
In October, the Saudi Arabian Oil Co, also known as Aramco, announced the launch of the Taleed Program, which aims to maintain and further grow the SME sector, Al Sa’adi added.