The Small and Medium Enterprises General Authority “Monsha’at” emphasized that the SME loan guarantee program it supervises activates the integrative and cooperative role with private sector financing entities toward providing the best financing solutions for commercial activities in the Kingdom of Saudi Arabia.
Monsha’at added that the Council of Ministers’ decision issued yesterday will strengthen the lending solutions it provides with the SME Loan Guarantee Program (Kafalah) by providing financing guarantees. Monsha’at is working to open new horizons and channels for lending to SMEs through several initiatives, including working capital and startup financing, in addition to integration with the Indirect Lending Initiative through financing companies licensed by the Saudi Arabian Monetary Authority.
In 2018, the Kafalah Program received support to raise its capital to SAR 1.6 billion as part of Monsha’at’s financing initiatives and the private sector stimulus initiatives, with the aim of expanding the loan guarantee service and encouraging financing entities to provide financial support to SME owners. This enabled the program to offer five new products alongside expanding the standard guarantee product (tourism sector loan guarantee, working capital, startups, guarantee portfolio, and non-bank financing companies portfolio), and to achieve notable growth in its operations: by the end of the third quarter of 2019, the value of financing granted under Kafalah guarantees grew by 90% to exceed SAR 5.3 billion, the number of guarantees grew by 30% to reach 2,867 guarantees worth more than SAR 3.4 billion, and the number of SMEs benefiting from the program rose to 1,915 enterprises.
Since its establishment in 2006, the Kafalah Program has provided loan guarantees to more than 14,600 enterprises, with more than SAR 30 billion in financing granted, while the guarantees issued exceeded SAR 16 billion.
Through its Kafalah program, Monsha’at is conducting a detailed study to launch new products for guaranteeing financing for franchising, supply chains, and e-commerce, alongside collaborative work on providing guarantees through the financing portal recently launched by Monsha’at, with the aim of strengthening access to financing for all SMEs.