Based on the continuous efforts of the Saudi Government in dealing with the effects and repercussions of Covid-19 pandemic, to take measures that guarantee the safety of citizens and residents, face the financial and economic impacts, as one of the urgent and supportive measures for the sustainability of the small and medium enterprises sector, and mitigate the financial and economic impacts of the consequences of the Covid-19, the Kafalah Program - affiliated with Monsha'at- launched a package of initiatives worth 450 million Saudi Riyals with a contribution from the National Development Fund to guarantee loans to small and medium-sized enterprises and contribute to providing the necessary financing for their business from banks and financing companies cooperating with the Program.
The package of initiatives aims to provide the necessary support to owners and workers of small and medium enterprises, in the interest of the Kingdom's government to maintain the continuity of the participation of the small and medium enterprises sector in the economic system, because supporting the financing of private sector enterprises is a development priority and an important economic engine for GDP growth. The packages of initiatives were represented in Kafalah guarantee for loans of micro, small and medium enterprises with high Saudization rate, with a total value of 500 million Saudi riyals. The second initiative targets enterprises operating in the supply chain, warehousing and logistics sector with a total value of 500 million Saudi Riyals, and the third initiative targets enterprises operating in the Hajj and Umrah services sector to guarantee a value of one billion Saudi riyals, in addition to another initiative to guarantee educational enterprises and academic activities, with a value of up to 250 million Saudi Riyals. This package will help in the growth of the guarantee portfolio with a total value of up to two billion two hundred and fifty million Saudi Riyals, supported by the Kafalah guarantee coverage of up to 90% of the value of the loans.
For his part, Mr. Homam Hashem, the Director General of Kafalah Program, explained that the enterprises benefiting from the initiatives have the right to obtain the necessary financing from the banking and non-banking financial institutions approved by SAMA. The financiers shall request the necessary guarantees to cover the financing risks through the initiatives of Kafalah Program. He pointed out that Kafalah Program is keen that the package of initiatives covers the largest segment of small and medium enterprises affected by the current conditions, especially those that bear the burden of high Saudization rates and participate in enriching local content, and their cash flows were significantly and negatively affected.
It is worth mentioning that Kafalah Program is a government institution operating under the umbrella of the Small and Medium Enterprises General Authority (Monsha'at) that actively contributes to stimulating financing for the private sector represented by small and medium enterprises to play an important role in developing the national economy and achieving the goals of the Saudi Vision 2030.