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Initiatives to guarantee the SME loans worth 450 million riyals to ensure the sustainability of the SME participation in the economic system

As part of the continuous efforts of the Kingdom of Saudi Arabia in dealing with the effects and consequences of the global epidemic (Covid-19) in order to take measures ensuring the safety of citizens and residents, confront the financial and economic impacts, and as one of the urgent and supportive measures for the sustainability of the SME sector, and to mitigate the financial and economic consequences of the virus Corona, “Kafalah" program, affiliated with “Monsha'at", has launched with the contribution of the National Development Fund a package of initiatives worth 450 million Saudi riyals to guarantee loans to SME and contribute to providing the necessary financing for their business from banks and financing companies participating with the program.

This initiative package aims at proving the necessary support for the SME owners and staff in the interest of the Kingdom to maintain the sustainability of the SME sector participation in the economy system. As supporting the financing of the private sector is a developmental priority and a major economy engine to the growth of the GDP. The initiatives package includes: Guaranteeing the loans of the micro, small and medium enterprises with a high Saudization level with a total value of about 500 million Saudi riyals; The second initiative targets the enterprises of the supply chains, warehousing, and logistic sector with a total value of about 500 million Saudi riyals; the third initiative targets the enterprises of the Hajj and Umrah Services sector with a value of 1 billion Saudi riyals; the fourth initiative targets the educational enterprises and scientific activities with a value of about 250 million Saudi riyals. This package of initiatives will help in the growth of the Guarantees Portfolio with a total value of about 2 billion and 250 million Saudi riyals, supported by the Kafalah program coverage of about 90% of the loans value.

The Director General of Kafalah Program, Mr. Homam Hashem, explained that the enterprises benefiting from these initiatives are eligible to obtaining the necessary financing from the bank and non-bank financing institutions that are approved by the Saudi Arabian Monetary Agency. The financing entities are then responsible for requesting the necessary guarantees to cover the financing risks through Kafalah program's initiatives. He also stressed that Kafalah program ensures that the initiative package covers the largest segment of the SME affected by the current situation, notably those that bear the burden of high Saudization rates and participate in the enrichment of local content, and which their cash flows have been significantly affected negatively.

It is noteworthy to mention that Kafalah program is one of the government institutions acting under the Small and Medium Enterprises General Authority “Monsha'at" that actively contributes to stimulating the financing of the private sector represented by the SME to play its important role in developing the national economy and achieving the goals of the Saudi Vision 2030.

For more information about the initiatives launched by the governmental entities, and to learn about how you can benefit from them, you can visit the main initiatives page through the following link:

https://initiatives.financialsector.gov.sa/Pages/default.aspx


Last Update : 2/11/2021 5:33 PM
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