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3,000 Saudi SMEs Benefit from Loans Exceeding $2.1 billion

Cafes are among the small establishments witnessing growth in the Saudi market (SPA)
Cafes are among the small establishments witnessing growth in the Saudi market (SPA)
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3,000 Saudi SMEs Benefit from Loans Exceeding $2.1 billion

Cafes are among the small establishments witnessing growth in the Saudi market (SPA)
Cafes are among the small establishments witnessing growth in the Saudi market (SPA)

Around 3,000 Saudi SMEs benefited from The Small and Medium Enterprises Loan Guarantee Program (Kafalah) during the first half of 2024.

The program reported issuing 3,543 financing guarantees worth over SAR 8 billion, compared to SAR 7.2 billion last year, marking an 11.66% increase. The value of the guarantees provided exceeded SAR 6 billion, compared to SAR 5.7 billion in 2023, reflecting a 4.63% increase, according to a statement by Kafalah.

CEO and Board Member Homam Hashem stated that SMEs are the main economic driver and crucial for achieving economic development and income diversification, as emphasized by Vision 2030.

He highlighted the importance of government and private sector efforts to support SMEs and address their challenges, pointing to the program’s success as a public-private partnership model.

Kafalah program, in coordination with the SME Bank, aims to achieve Vision 2030 goals in all initiatives and products, helping SMEs obtain financing to grow and expand across the Kingdom, and encouraging financial institutions to engage with the SME sector.

Since its launch in fiscal year 2006, and until the end of the second quarter of 2024, the program has approved more than 63,000 guarantees benefitting 22,000 SMEs, with a total value of financing exceeding SAR 99 billion ($26.4 billion). The total value of issued guarantees amounted to SAR 70.5 billion.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."