JEDDAH, 10 April 2008 — About 400 men and women attended yesterday an educational seminar on financing small businesses through Saudi banks with a focus on the Kafala program that provides business start-up loans of up to SR2 million to unemployed Saudis.
“We at the chamber are working to support small projects and provide coordination with the concerned parties,” Mustafa Sabri, secretary-general of the Jeddah Chamber of Commerce and Industry, said in his opening speech.
According to Sabri, 80 to 90 percent of the membership in the country’s numerous regional chambers of commerce is made up of small businesses. This, he added, underscored the need to pay special attention to developing this important sector.
This is the impetus behind Kafala, which acts as an intermediary between small business owners and banks to help people secure financing for start-up or ongoing costs of doing business. Sabri said such a program was necessary due to “the reluctance of most banks in Saudi Arabia to provide financing to small enterprises for a number of reasons, foremost of which is the lack of adequate guarantees.
For his part, Fahd Al-Shabibi, manager of the credit section in the Kafala program, gave a presentation through which he assured the audience that the program offers all types of financing in accordance with Shariah compliant banking. The program offers between SR50,000 and SR1 million in loan co-signing. The program also offers seven-year financing plans between SR100,000 and SR2 million in collaboration with Saudi banks.
The Ministry of Finance and 10 participating banks established the program to help businesses that are members of the nation’s chambers of commerce and industry. The participating banks are the National Commercial Bank, Samba, SABB, Riyad Bank, Banque Saudi Fransi, Saudi Hollandi Bank, Saudi Investment Bank, Bank Al-Jazira, Arab National Bank and Al-Rajhi Bank.
