{"id":30693,"date":"2021-01-12T16:21:46","date_gmt":"2021-01-12T13:21:46","guid":{"rendered":"https:\/\/amlak.net.sa\/?p=30693"},"modified":"2021-01-12T16:21:46","modified_gmt":"2021-01-12T13:21:46","slug":"%d8%aa%d9%85%d9%88%d9%8a%d9%84-%d8%a8%d8%b1%d9%86%d8%a7%d9%85%d8%ac-%d9%83%d9%81%d8%a7%d9%84%d8%a9","status":"publish","type":"post","link":"https:\/\/amlak.net.sa\/en\/30693\/","title":{"rendered":"Kafala program pumps SAR 7 billion into businesses' arteries"},"content":{"rendered":"

Funding<\/strong> \u2013 The importance of the role of \u00abSponsorship program<\/a>\u00bbFrom the growth of the Kingdom\u2019s domestic economy, the role of entrepreneurship, startups, and small and medium-sized enterprises is an important and difficult to ignore pillar; analysts and experts expect that its contribution to GDP will rise to 35% according to the National Transformation Program 2020 and the Kingdom Vision 2030; in contrast, globally, these enterprises contribute 40-50%, indicating a significant slowdown in the impact of our small enterprises, which forced Kuffala to play a pioneering role until small companies achieve their goals.<\/p>\n\n\n\n

Guarantees exceeding 7 billion riyals<\/h4>\n\n\n\n

In numbers terms, Faras bin Khalid Al Mutawakil, the first credit analyst at the program \u00abBail<\/a>\u00bbDuring a recent seminar held in Riyadh titled \u00abVision 2030 and Opportunities for Financing Small and Medium-sized Enterprises,\u00bb the value of guarantees provided by the program since its inception exceeded 7 billion riyals; more than seven thousand enterprises have benefited from them, representing 80% of the total funds. The Faras said that \u00abKafala\u00bb was one of the first programs to complete its programs in direct cooperation between the private sector, banks, and government agencies; to encourage funding directed to small and medium-sized entrepreneurs.<\/p>\n\n\n\n

In this regard, Abdul-Rahman Al-Majd, Regional Director of Corporate Banking at Riyad Bank in the Central Region, pointed out that the Kuffala program has a strategic partnership with banks. In 2017, about 1,730 establishments were funded with 3 billion riyals, while the number increased to 2,000 establishments worth 5 billion riyals in 2018.\u00a0<\/p>\n\n\n\n

1.5 million small businesses <\/h3>\n\n\n\n

According to statistics published in a recent report issued by the National Observatory, the number of small enterprises in the private sector stands at 1,496,178, accounting for 97.6% of the total number of enterprises; while the number of medium-sized enterprises stands at 31,328, accounting for 2% of the total number of enterprises operating in the private sector; this confirms the pioneering role of small enterprises in supporting and developing the national economy and diversifying income sources, which prompted the SME Authority to study the establishment of a dedicated bank, which will constitute a qualitative leap in financing, to work alongside the \u00abGuarantee Program\u00bb to complete The department will start operating thousands of entrepreneurial projects once the competent authorities approve and allow the establishment of this specialized bank; its positive impact will be directly reflected on the performance of the establishments.<\/p>\n\n\n\n

78.1 billion loans to medium-sized enterprises<\/h4>\n\n\n\n

Due to the importance of the main role played by financing small and medium-sized enterprises in economic development, statistics from Manas indicate that medium-sized enterprises have controlled the largest share of loans at 72 %, equivalent to SAR 78.1 billion, while loans to small businesses accounted for % about 23.5%, amounting to SAR 25.5 billion, of which SAR 22.3 billion were provided through banks and about SAR 3.3 billion through financing companies. The number of financing entities has increased to 26, and growth plans exceeded 45% in terms of financing value and 22% in terms of collateral value. <\/p>\n\n\n\n

This comes alongside the Social Development Bank\u2019s initiative to monitor a budget of up to 22 billion riyals to support the establishment of more than 70,000 small businesses in the private sector.<\/p>\n\n\n\n

The most important achievements of the Kafala program<\/h3>\n\n\n\n

 The program's capital was increased to 1.7 billion riyals.<\/p>\n\n\n\n

 The new definition of small and medium-sized enterprises is being adopted.<\/p>\n\n\n\n

 Reducing the procedures for issuing bail from 17 working days to 3 days, along with lifting the credit guarantee.<\/p>\n\n\n\n

 The maximum amount of bail has been increased from 1.6 million riyals to 2.5 million riyals for small establishments and 15 million riyals for medium-sized establishments.<\/p>\n\n\n\n

 Developing a governance framework for the program and forming committees that are derived from the board of directors.<\/p>\n\n\n\n

 Launching new products and programs to support the targeted sectors in line with the Kingdom Vision 2030.<\/p>\n\n\n\n

 Initiating initiatives to stimulate funding for female entrepreneurs and promising regions, as well as emerging enterprises.<\/p>\n\n\n\n

 Raising revenues, investing all resources, and reducing the deficit.<\/p>\n\n\n\n

 Reducing the capital adequacy ratio to healthy rates to enable programs to grow and be sustainable.<\/p>\n\n\n\n

 Signing an amended agreement with all banks and funding agencies that are involved in the program.<\/p>\n\n\n\n

 Signing agreements with credit data companies (Signature of Attribute).<\/p>\n\n\n\n

\u00a0Organizing the first SME financing conference in Riyadh, in cooperation with the World Bank, and hosting the Middle East and North Africa Insurance Companies Forum 2020.<\/p>\n\n\n\n

 Adopting a proactive hedging strategy to protect the program and activating risk forecasting.<\/p>","protected":false},"excerpt":{"rendered":"

Reading time: <\/span> 2<\/span> Minutes<\/span><\/span>Finance \u2013 The importance of the \u00abKafalah Program\u00bb has become increasingly evident in light of the Kingdom\u2019s growing local economy, given that entrepreneurship, startups, and small and medium-sized enterprises (SMEs) represent a vital pillar that is difficult to overlook; Analysts and experts expect their contribution to GDP to rise to 35.1% according to the National Transformation Program 2020 and Saudi Vision 2030. In contrast, we find that globally, these enterprises\u2026 Read more<\/a><\/p>","protected":false},"author":10,"featured_media":30694,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"\u062a\u0645\u0648\u064a\u0644 - \u0628\u0631\u0646\u0627\u0645\u062c \u0643\u0641\u0627\u0644\u0629 \u064a\u0636\u062e \u0641\u064a \u0634\u0631\u0627\u064a\u064a\u0646 \u0627\u0644\u0645\u0646\u0634\u0622\u062a 7 \u0645\u0644\u064a\u0627\u0631\u0627\u062a \u0631\u064a\u0627\u0644 \u0627\u0633\u062a\u0641\u0627\u062f\u062a \u0645\u0646\u0647\u0627 \u0633\u0628\u0639\u0629 \u0622\u0644\u0627\u0641 \u0645\u0646\u0634\u0623\u0629","_seopress_titles_desc":"\u062a\u0645\u0648\u064a\u0644 - \u0628\u0631\u0646\u0627\u0645\u062c \u0643\u0641\u0627\u0644\u0629 \u064a\u0636\u062e \u0641\u064a \u0634\u0631\u0627\u064a\u064a\u0646 \u0627\u0644\u0645\u0646\u0634\u0622\u062a 7 \u0645\u0644\u064a\u0627\u0631\u0627\u062a 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