DAMMAM: A number of agreements to finance projects were struck in the past three months, but the young entrepreneurs who floated these projects were in debts before their projects started because of violations.

Agreements were signed for cash amounts ranging from SR50,000 to SR400,000, Hussain Al-Abkary, supervisor of the Al-Muawiyah fund project in the Eastern Province, was quoted by local media as saying. He stressed the importance of conducting a feasibility study for the projects because it’s one of the main things to support the funding file. He said 19 projects have been approved in Qatif during the past period.

Al-Abkary said cash from projects can be obtained from government funds or commercial banks, which compete to offer money if the conditions are fulfilled.

He pointed out that banks take into consideration the project owner’s ability to pay the debt, and criticized some young people for getting quick funding for their projects.

“Banks don’t give funding quickly, they need time to study all aspects of the projects and evaluate a number of matters, such as the ability to pay back, spending, returns and monitoring the potential of the project itself,” he said.

Al-Abkary said those who apply for funds shouldn’t be disappointed if they don’t get the sum they applied for, because banks ask for annual budgets that are approved and audited by legal accounting offices.

He said funding bodies, including banks, look upon individual establishments suspiciously because of the high risk, and banks try to avoid individual funding in case the owner dies or gets injured, leading to the cancelation of the project.

Al-Abkary said overcoming the funding problem is easy now because there are a number of government funding bodies that stipulate the entrepreneur should be a Saudi national and has no work and no commercial register.

He confirmed that the majority of projects funded by Al-Muawiyah Fund are successful, because of the conditions stipulated for obtaining a loan the most important of which is the registration in “How to Start a small business” workshop and by presenting a feasibility study of the project.

Al-Abkary said the industrial development fund offers loans for industrial projects at a value that could reach SR20 million for medium size projects, the fund also offers funding for individual projects with small capital by considering the project as collateral.

Major challenges that face young men are represented in regulatory procedures, and some think Nitaqat could be one of the biggest hurdles, which isn’t true.

He said the previous stage has been characterized with fierce competition between local and foreign workers, and confirmed the importance of the availability of many elements that guarantee the success of young entrepreneurs, such as strong will, willingness to take risks and enthusiasm.