Tuesday, March 5, 2024
Editor's PickBillion-dollar commitment: Saudi’s digital SME financing drive

Billion-dollar commitment: Saudi’s digital SME financing drive

Saudi Arabia’s Small and Medium Enterprises Bank (SME Bank) and its subsidiaries have signed 20 agreements worth over SAR1 billion (US$266.46 million) with fintech companies and investment funds in a bid to diversify funding solutions for the SME sector.

The bank signed deals worth SAR500 million (US$133.23 million) with Islamic crowdfunding and investment platforms – Lendo, Manafea, Raqamyah, Foras, Tameed, Sukuk Financial Company, Lamaa. This comes as an extension of a SAR10.5 billion (US$2.8 billion) program to support indirect lending to SMEs, bringing the number of its partner agencies to 50.

Through Kafalah, the SME Loan Guarantee Program, a program affiliated to SME Bank, seven MoUs, worth SAR300 million (US$79.94 million) with fintech companies were signed. The platforms included Hala, Tameed, Lamaa, Lendo,, Raqamyah and Foras. The MoUs were in support of MSMEs in the Kingdom.

Saudi Venture Capital Company (SVC), another SME Bank subsidiary, formalized investment agreements to the tune of SAR232 million (US$61.82 million) with early-stage venture capital and debt fund Shorroq Partners, Korean Venture Investment Company and Partners for Growth to stimulate investments in Saudi start-ups.

SME Bank is a government initiative: established in 2021, it is mandated to support the Saudi Kingdom’s Vision 2030 of raising contribution of SMEs to the GDP to 35% by 2030 and to raise the SME financing volume to 20% of total loan portfolio. It is worth noting that the bank is also to support the country’s vision of building a digital economy and making itself a digital, hence its heavy involvement and investment in the fintech, digital and venture capital space.

In Q1 2023, SME Bank has provided over SAR1.1 billion (US$293.07 million) to over 300SMEs. SVC on the other hand deployed SAR1.75 billion (US$466.24 million) to 32 funds and 674 start-ups. In the same period, Kafalah raised its total value of financing by 17%, bringing the total value of financing provided since its inception to over SAR80 billion (US$21.31 billion).

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