A total of 4,082 enterprises have been funded at a cost of SR7 billion since the inception of the “Kafalah” SME financing program in 2006.

This was revealed at a joint press conference held at the Four Seasons Hotel in Riyadh on Wednesday. Osama Al-Mubarak, director of the SME Financing Guarantee Program, Talat Zaki Hafez, secretary-general of the Media and Banking Awareness Committee for Saudi banks, and Mohamed Al-Rubaya, team leader of the committee, were present at the media briefing held here.

Kafalah, a joint developmental initiative between the Ministry of Finance and Saudi banks, was set up to develop small and medium-sized enterprises.

It has issued a total of 7,280 guarantees for a total sum of SR3.5 million as of last year.

Participating banks have provided funding facilities valued at SR7.1 million for the advantage of 4,082 small and medium-sized enterprises, where this amount was distributed in varying proportions among the Kingdom’s different economic sectors.

Zaki Hafez said that the SME is a vital sector to be developed since it contributes more than 50 percent to the GDP.

He said that the sixth edition of the program was able to achieve its 10-year target within the first eight years.

“Our focus this year would be to advise young entrepreneurs on to how to make use of the services and facilities available for the development of their respective businesses,” he said.

He also stressed that the SME Financing Guarantee Program is one of the basic fundamentals upon which the Kingdom relies for enhancing and supporting the contribution of the SME sector to the local production.

“We are concentrating on SMEs since it is being harnessed by the local youths and it also solves the unemployment problem of the country,” he said.

He pointed out that launching the program’s sixth promotional campaign falls in line with the ongoing partnership between Saudi banks participating in the program, the Ministry of Finance and the Saudi Fund for Industrial Development (SFID).

The partnership aims to promote the business enterprises sector and stimulate youth to take advantage of the program through the presentation of successful experiences that enabled enable participants to further enhance their business.

Hafiz described the program as part of a long-term strategy to attract budding businesses to further expand their scope and productivity.

Al-Mubarak said the program managed to provide the owners of small and medium-sized enterprises with an effective financing instrument enhanced with a broad range of incentive advantages.

“Establishing Kafalah has definitely led to a qualitative leap in terms of bridging the gap in the financing system available for small and medium-sized enterprises. Today, the program stands as one of the most successful forms of partnerships and cooperation between a governmental body and banks. There were 2,515 program-approved guaranties in 2013 compared to only 51 in 2006,” he said.

“Program activities also include training and the launching of awareness campaigns and workshops for young entrepreneurs in cooperation with the World Bank, The Institute of Banking and the Media and Banking Awareness Committee and with the participation of Saudi banks and local commerce chambers,” Al-Mubarak said.

Al-Mubarak stressed that the campaign aims to broaden the base of program beneficiaries all over the Kingdom.

In addition, the program aims to shed light on requirements such as project feasibility studies, work plans and financial statements.

Al-Rubaya mentioned that Saudi banks are aware of the significant role played by SMEs in supporting the national economy and achieving a comprehensive development.