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​Historical Background of the Program




Pursuant to the Royal Order No. 7/B/1510 dated 23/11/1422 H approving the proposal for establishing  an integrated government program for activating the role of the small and medium enterprises, a sector known for its undeniable positive socio-economic contribution, H.E. the Minister of  Finance issued his decision No. (1166) dated 4/5/1425 H. The decision approved the Regulatory Rules of the Small and Medium Enterprises Financing Guarantee Program. The Management of the Program was assigned to the Saudi Industrial Development Fund; the objective being to overcome the impediments to the financing of the small and medium enterprises. As known, the small and medium enterprises are economically viable; however they are unable to provide the required guarantees to the financing parties.

The Program started to issue its guarantees as of the beginning of the fiscal year 1426/1427 H (2006 G), and since then the Program has made indisputably remarkable achievements. In its first year of operation, the Program issued 51 guarantees in favor of 36 enterprises. By the grace of Allah and the implementation of  the Program’s ambitious strategy by competent employees, the number of guarantees and beneficiary enterprises multiplied. In fact, these numbers exceeded the targets of the ten-year strategic plan before the end of its term (latest statistics are available on the statistical reports page).

In the process of achieving its socio-economic objectives, the Program witnessed major developments in its policies and procedures reflecting the requirements of the small and medium enterprises sector. These developments which focus on availing the services of the Program to a larger base of beneficiaries were effected after extensive  consultations, with the financing and related parties, based on the demonstrated need for the services of the Program. 

In the year 2009G, the Program increased the guarantee coverage percentage from 50% to 75%  of the value the financing  provided to emerging small and medium enterprises; in the year 2011G, the guarantee coverage percentage has been raised to 80% of the value the financing  provided to both emerging and established  small and medium enterprises. In the same year, 2011G, the Program raised the maximum annual revenue of the activities eligible for obtaining Program guarantees from SR 20 million to SR 30 million. Furthermore, the Program used to apply its policies on each commercial enterprise, irrespective of its multiple economic activities. However, today the Program deals with each economic activity on its own if a number of economic activities are under a single commercial enterprise. Although a new ceiling has been introduced for each enterprise, this change in policy would surely allow all eligible economic activities to become beneficiaries.

Last Update : 2/9/2021 2:05 PM
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