More than 500 economists and trade experts participated in the forum including Commerce and Industry Minister Tawfiq Al-Rabiah and Labor Minister Adel Fakeih.
In his inaugural speech, Al-Assaf said this conference is being held at a time coinciding with the comprehensive program of economic development being undertaken by the government of Custodian of the Two Holy Mosques King Abdullah, including the promotion of SMEs.
“I will talk directly on the loan program launched by the Ministry of Finance for small and medium enterprises in the Kingdom, including the government funds. We provide loans for education and health projects including small and medium enterprises as well as the educational sector. We also provide funds for big projects, including universities, colleges and hospitals as well as medical specialist complexes,” said Al-Assaf.
According to the minister, the total funds extended to projects since its establishment amount to around SR5 billion. This is in addition to the Saudi Industrial Development Fund (SIDF) which also helps in financing SMEs. Their beneficiaries has now reached 10 million, or about 45 percent of the number of projects being financed by the fund since its inception as of the end of 2011.
According to the Al-Assaf there has been remarkable progress since the launch of the program in 2006 till the end of 2011. As many as 2,000 out of the 3,000 registered SMEs have benefited from the program. To enhance the project, it has been decided recently to increase financial sponsorship to SR1.6 million for a single enterprise. It has also been decided to increase the total number of individual sponsorships to between SR5 and SR10 million for companies.
Also in view of the difficulties that Saudi inventors face in obtaining the necessary funds, a proposal for establishing a program for this purpose is now under study. At the same time, the Agricultural Development Fund is also sponsoring SMEs in the agriculture sector.
The Saudi Credit and Savings Bank are also playing a vital role in financing SMEs. As many as 21,000 SMEs have benefited from the scheme involving a total investment outlay of SR4 billion. Saudi banks have also contributed directly in nationalizing projects and providing 30,000 job opportunities for Saudis in various sectors. It is also planning this year to finance 6,000 projects with a total finance of SR2 billion, Al-Assaf added. On his part, Fakeih, said he is among those who see the positive impact of SMEs on the economy in terms of the jobs generated by this sector.
“Equally important is the social impact that reinforces the argument in favor of the development of this sector," he said, adding that the positive role of the SMEs is encouraging the youth to rely on themselves and promote the spirit of initiative in them.
As such, supporting and developing the SMEs and boosting their role in national economy is an urgent task in view of its direct impact on the growth of GDP and its impact on those enterprises, its role in diversifying the economic base and creating job opportunities for the youth, he added.
The minister said that in view of Saudi Arabia's market status the country should work to boost the sector in three key areas; increase the number of Saudis working in this sector, diversify the activities of the sector, and sustain their growth. In doing so, it would help realize the objectives of national development, he added. Noting that despite the minor contribution of SMEs to the Saudi national economy compared to other countries, they have provided job opportunities for a large number of Saudi workers, which stands at approximately 5 million. Of these, 80 percent of the workforce is drawn from small enterprises.
The minister said SMEs in Saudi Arabia account for 22 percent of total national output and 51 percent of the total workforce in 2009, 40 percent of them in the construction sector. Currently, 31 percent of the Saudi workforce is engaged in the commercial sector and 15 percent in social services, reflecting their scale of priorities.
"Our target in 2030 is to raise the role of SMES to account for 33 percent of total national output and 57 percent for the Saudi workforce. And to achieve this target, we propose to take a number of initiatives."
Al-Rabiah expressed his support for the measures. "We facilitate these SMEs by catering to all their needs in terms of the necessary documents and licenses that will be available online," he said, adding that in order to support them the government shall streamline procedures.
Highlighting the private sector's initiatives in sponsoring and financing SMEs, Al-Rabiah said they include the Centennial Fund, Bab Rizq Jamil and many others.
