Saudi Arabia’s Cabinet on Tuesday approved the establishment of a bank for small and medium enterprises, state news agency (SPA) reported.
“The SMEs Bank brings together all financing solutions under one umbrella to enable the small and medium enterprises sector to access appropriate financing and achieve stability and growth,” the Ministry of Commerce wrote on Twitter.
According to a report by the SPA, the Small and Medium Enterprises Bank will focus on providing all its products and services in a digital form without the need to establish branches, which will contribute to the delivery of services to all promising regions, and focuses on applying international best practices in cooperation with international and local partners to build a portfolio of appropriate products for each segment of small and medium enterprises.
The launch of the SMEs Bank was the work of the Kingdom’s General Authority for Small and Medium Enterprise (Monshaat) in line with the national strategy for SMEs and included 16 basic initiatives and 9 pivotal initiatives, according to SPA’s report.
Monshaat said the total amount disbursed in the indirect lending initiative since the launch of the initiative until the end of last year reached two billion riyals, while the amount approved for investment exceeded one billion riyals. The total value of financing guarantees through the financing guarantee program for SMEs (Kafalah initiative) from the year 2018 until the end of last year reached 32.2 billion riyals.
“The establishment of the bank was based on a benchmarking study that included 14 countries. To discuss best practices in supporting financing small and medium enterprises, analyzing the current situation and identifying financing gaps,” SPA’s report added.