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Loan guarantees provided to MSMEs from Kafalah, the Kingdom’s small and medium enterprise loan guarantee rose 10% y-o-y to SAR 15.6 bn in 2023,state news agency SPA reports citing a Kafalah press release. Some SAR 12.1 bn of that went to SMEs. The program is operated by the SME Bank.
Uh, Enterprise? Define MSMEs: The Small and Medium Enterprises General Authority (Monsha’at) defines them as follows:
- Micro enterprises have 1-5 full time employees and make up to SAR 3 mn in annual revenues;
- Small enterprises have 6-49 full time employees and make between SAR 3 mn and SAR 40 mn in annual revenues;
- Medium enterprises have 50-249 full time employees and make between SAR 40 mn and SAR 200 mn in annual revenues.
Kafalah is writing larger tickets for a smaller number of guarantees, reporting a 13% y-o-y dip to 7.2k in the number of guarantees approved.
Kafalah has been on drive to grow outside Riyadh: Enterprises operating out of Riyadh, Eastern Region, and Makkah have received 11% more guarantees in 2023 on an annual basis, while Asir saw a 66% increase, Jouf (45%), and Tabuk saw a 42% hike.
Riyadh remains the nation’s entrepreneurial hub, with it now being home to 43.3% of SMEs, according to the Monsha’at report.
Kafala ❤️ women: Some 1.1 women entrepreneurs received guarantees worth SAR 1.7 bn last year.
Higher employment rates in MSMEs: Kafala claims that enterprises usually see a 20% hike in staff numbers only six months after receiving Kafala guarantees.
Product portfolio: Kafalah offers 10 products to enterprises working in sectors including export, consultancy, culture and entertainment. (You can find the details for each product here)
You can still apply for the regular Kafalah product if you operate outside these sectors. It offers a maximum of SAR 2.5 mn in loan guarantees for micro enterprises, SAR 5 mn for small enterprises, and SAR 15 mn for medium enterprises, according to Kafalah website.
How to apply: Enterprises looking to apply for loan guarantees from Kafalah can find the requirements here or can go through one of the partner lenders mentioned here to learn about the process.
DATA POINT- The number of SMEs in the kingdom rose 3.5% q-o-q to 1.27 mn in 3Q 2023, a quarterly report (pdf) by Monsha’at showed. Small businesses grew Saudi’s non-oil economy by 3.6% in 3Q, the report says.
Micro-sized firms are the most common SMEs:
- Microenterprises accounted for for 1.1 mn of all SMEs in the kingdom (up from 1.06 mn the previous quarter);
- Small-sized companies: 151.2k (down from 152.8k);
- Medium-sized enterprises: 18.2k (up from 17.9k).
