RIYADH: Credit facilities extended to micro, small, and medium enterprises in Saudi Arabia grew by 27.62 percent year on year in 2024, totaling SR351.7 billion ($93.8 billion), according to official data.
The Kingdom’s central bank, also known as SAMA, revealed that 94.82 percent of these loans were provided by Saudi banks, while finance companies contributed 5.18 percent.
MSME lending made up 9.4 percent of banks’ and 18.9 percent of finance companies’ loan portfolios in 2024, reflecting growing alignment with the government’s Vision 2030 target of allocating 20 percent of credit to this vital sector.
In 2024, medium-sized enterprises received the largest share of credit facilities, totaling 53.23 percent, or SR187.21 billion.
Micro enterprises — those generating up to SR3 million in revenue with a workforce of no more than five employees — saw substantial growth, with credit increasing by 70 percent to SR42.32 billion, despite holding a smaller overall share.
Credit to small enterprises, which made up 34.74 percent of MSME financing, rose by 32.4 percent to SR122.17 billion during the same period.
The sharp increase in bank lending to Saudi Arabia’s SMEs aligns closely with the Kingdom’s Vision 2030 objective of raising the sector’s contribution to gross domestic product to 35 percent.
To help achieve this target, Saudi banks are increasingly extending credit to small businesses, supported by government-backed incentives such as the Kafalah loan guarantee program, which operates under the supervision of Monsha’at.
Through Kafalah, the government guarantees up to 80 percent of loans extended to eligible SMEs, significantly reducing the risk for commercial banks and encouraging broader lending.
The SME Bank plays a complementary role by targeting underserved and high-risk segments through alternative financing solutions, such as debt-based crowdfunding.
In its latest move, the institution allocated SR240 million in partnership with fintech platforms Manafa, Lendo, and Tameed, enabling short-term, flexible financing of up to SR1 million for qualifying MSMEs.
Together, these efforts are expanding access to capital across the SME landscape, supporting entrepreneurship, job creation, and economic diversification.
According to the latest report by Monsha’at, in the fourth quarter of 2024, the Kingdom saw a 67 percent quarter-on-quarter surge in new commercial registrations, totaling more than 160,000 new businesses, bringing the total to over 1.6 million registered enterprises nationwide.
The rise was particularly strong in e-commerce, with a 10 percent increase in new digital business registrations, pushing the total number of e-commerce firms to 40,953 by the end of the year.
Riyadh province led the growth, accounting for 39 percent of all new registrations, followed by Makkah with 17 percent, the Eastern Province with 16 percent, and smaller but growing contributions from regions like Qassim and Asir.
This surge in new business formation reflects increasing entrepreneurial activity across the Kingdom — a trend aligned with goals to diversify the economy and build a thriving private sector.
The synchronized rise in both entrepreneurial activity and credit availability reflects a maturing SME ecosystem and a coordinated national strategy to fuel private sector-led growth.
