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The Small and Medium Enterprises Loan Guarantee Program (Kafalah) provides the necessary guarantees for financiers to assist MSMEs and entrepreneurs in obtaining financing necessary for development of their activities, and aims to encourage financiers to deal with SMEs sector in addition to attracting a new segment of MSME owners that have not previously dealt with financiers.

Kafalah Program seeks to achieve the goals and themes of Saudi Vision 2030 in all of its initiatives and products being developed with cooperating financiers and relevant entities, so that the Program will have an effective positive impact on the development and sustainability of SMEs sector in the interest of the Kingdom's economy.​

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One of the Program objectives is to increase the number of cooperating financiers to provide the best services to owners of medium-sized enterprises. In this regard, the Program's services have been made available to foreign banks operating in KSA, in addition to non-bank financiers licensed by the Saudi Central Bank (SAMA).​​

The Program charges a nominal annual administrative fee for the examination of financing guarantee request and follow-up and is paid to Kafalah by financier.​​

Yes, Kafalah Program provides a guarantee for financing the purchase of vehicles and equipment if they are used to operate the activity.​​

Kafalah is a non-profit government development program aimed at sustainability in the delivery of its services.​​

The Program guarantees all economic activities except:-

• Activities not considered within the definition of SMEs.
• Financial or real estate mudarabah in addition to financing projects.
• Activities in violation of the laws and regulations in KSA.
• Personal and real estate loans.​

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All Saudi financiers cooperating with the Program and granting loans and credit facilities to SMEs.

• Banks: -

(National Commercial Bank, Banque Saudi Fransi, Arab Bank, Gulf International Bank, Riyad Bank, Al-Rajhi Bank, Bank Albilad, Emirates NBD, Bank Aljazira, SABB, Alinma Bank, and The Saudi Investment Bank)

• Financing companies

(Saudi Finance Company - Tawkelat Financing Company - Murabaha Marena Financing Company - Yanal Finance Company - Nayifat Finance Company - Quara Finance Company - Gulf Finance Company - Al-Yusr Leasing and Financing Company - Bab Rizq Jameel Company - Osoul Modern Finance Company - Al Jasriah Co. for Finance LLC - Al-Amthal Financing Company - Tamweel Aloula Company - Tayseer Finance Company - Taajeer Finance Company - National Finance Company - AlRaedah Finance Company - Abdul Latif Jameel Finance Company - Ajil Financial Services Company - Amlak International for Real Estate Finance Company - Raya Financing Company - Aljabr Financing Company).​

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1. ​SME applies for financing to financiers cooperating with the Program directly or applies through the financing portal supervised by SME General Authority (Monsha'at).
2. Financiers examine SME financing application. If the financier needs guarantees to cover the risks, it will be forwarded to the Program to study the guarantee application.
3. Kafalah Program examines the application. In case of the Program approval, a guarantee shall be issued in favor of the financier.​

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The personal guarantees of the enterprise or company owner are sufficient to cover the amount of guarantee.​​

1. Microenterprises (number of employees (1 to 5), sales/ revenues of the enterprise (no more than SAR 3 million)
2. Small enterprises (number of employees (6 to 49), sales / revenues of the enterprise (SAR 3 million to SAR 40 million)
3. Small enterprises (number of employees (50 to 249), sales / revenues of the enterprise (SAR 40 million to SAR 200 million)​

The Program shall pay the lender on behalf of the activity if all the requirements of the guarantee payment request submitted by the financier have been met. The Program shall then claim the debtor to pay the debt in accordance with the relevant laws.​​

The decision to determine the profit margins and financing costs is calculated by the financier according to several criteria after preparing the study. The most important of these criteria are the type of facility, the level of risk, and the credit history.​​

Kafalah guarantees financing from cooperating financiers for the existing and new activity, while there are criteria for eligible activities

Key criteria for eligible activities.

1.  The activity should be economically and financially feasible from the point of view of the Program and the financier and in line with Saudi Vision 2030.
2.  The activity contributes to enhancing the competitiveness of the Kingdom's MSMEs.
3. The activity recruits and trains Saudis. 4. The activity contributes to the replacement of imported products by local products.
4. The activity produces innovative goods and services.
5. Foreign majority-owned enterprises may be guaranteed if the activity is a targeted activity and obtains high rate of Saudization in Nitaqat (high green or platinum). ​