The Small and Medium Enterprises General Authority “Monsha’at” today launched the Small and Medium Enterprises Bank (SME Bank), one of the development funds and banks under the National Development Fund. The bank aims to increase the financing provided to the SME sector, close the financing gap, strengthen the contributions of financial institutions in providing innovative financing solutions, and achieve financial stability for this vital sector so that it becomes a key pillar of economic development in the Kingdom of Saudi Arabia and an enabler for achieving Vision 2030.

The SME Bank focuses on providing all its products and services digitally without the need to establish branches, helping services reach all promising regions. It also focuses on applying global best practices in cooperation with international and local partners to build a product portfolio suited to each segment of SMEs.

The launch of the SME Bank is in line with the National SME Strategy developed by Monsha’at, which included 16 core initiatives and 9 pivotal initiatives, one of which is the establishment of the bank. 3 quality initiatives designed by Monsha’at formed the core of the bank: the Indirect Lending Initiative with capital of SAR 1.6 billion, the establishment of the Saudi Venture Capital Company with capital of SAR 2.8 billion, and raising the capital of the Kafalah Program to SAR 1.6 billion.

The total amounts disbursed under the Indirect Lending Initiative from its launch until the end of 2020 reached SAR 2 billion, while the amounts approved for investment exceeded SAR 1 billion, and the total value of loan guarantees through the SME Loan Guarantee Program (Kafalah) from 2018 until the end of 2020 reached SAR 32.2 billion.

The bank was established on the basis of a benchmarking study covering 14 countries to examine best practices in supporting SME financing, along with an analysis of the current situation and identification of financing gaps.

Monsha’at established the SME Bank to be an umbrella for all financing solutions, including lending and equity financing, loan guarantees, and alternative financing, as part of its tireless work to create a stimulating environment that meets the basic needs of SMEs and gives them opportunities to grow and prosper.