RIYADH: Government and private sector representatives have expressed readiness to support small and medium enterprises (SMEs) that will help reduce red tape for investors to participate in business ventures.
Business owners met with the undersecretary of the Commerce Ministry at a forum organized by the SME Development Committee at Riyadh Chamber of Commerce and industry (RCCI).
The forum, which was attended by RCCI Board Chairman Abdulrahman Al-Jeraisy and Board of Trustees chairman of Riyadh Center for SME Development Khalaf Al-Shammari, touched on thematic issues related to the guidelines and arrangements on how to launch free businesses and the principles of project appraisal by lending agencies.
Undersecretary of the Ministry of Commerce and Industry for Industrial Affairs Qasim Al-Maimani said the ministry had adopted a series of steps to remove obstacles and simplify measures for investors.
For instance, commercial registration process could be finalized in one day and industrial licenses will now take three days instead of one month to finalize. Customs exemptions will take one month instead of eight months, he said.
Meanwhile, Hamad Al-Khudair, head of projects assessment at Saudi Credit and Saving Bank (SCSB), said SCSB tries to shorten the time on decision to extend loans. However, some attendees resented the SCSB mechanism for clearing loans, noting it is time-consuming and frustrates ambitions of the entrepreneurs.
Abdulaziz Imail, director general of the SME Support Program at the Ministry of Labor, said the ministry plans to establish a national center for SMEs. According to estimates, 67 percent of Saudi young entrepreneurs do not know how to enter labor market and that 790,000 SME firms operating in the Kingdom have only 9 percent of Saudi workforce, he said. The Kingdom needs 36 initiatives to launch a business entity for SMEs, he added.
Mohammed Al-Absi, acting director of the Human Resources Development Fund (HRDF), said the mechanism followed by HRDF to provide financial support to investors.
Nabil Al-Mubarak, director general of Saudi Credit Bureau (SIMAH), stressed the credit record and the role of credit behavior in the realization of Saudi young ambitions. He expressed wonder why 80 percent of loan applications are rejected by Saudi banks.
On the other hand, some attendees said they appreciated the government efforts in supporting youths to set up free businesses but said such efforts need more coordination in light of dominance of foreign workforce over SME activities.
Al-Jeraisy, who presided over the forum, said SMEs used to employ 70 percent of citizens in so many countries and have a share of 37 to 62 percent of the gross domestic product (GDP) of those countries whereas the SME projects in the Kingdom are employing nearly 25 percent of the workforce of which 75 percent are foreigners.
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