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Saudi Arabia: 4 Billion Riyals to Boost SMEs

Saudi Arabia: 4 Billion Riyals to Boost SMEs

Thursday, 19 December, 2019 - 10:15

Saudi Arabia’s Public Investment Fund has launched a 4 billion riyal ($1.07 billion) fund of funds company (Jada), the Kingdom’s sovereign wealth fund (PIF) said on Wednesday.

Jada, which was first announced in 2017, aims to support small and medium-sized enterprises (SMEs) by investing in venture capital and private equity funds.

The initiative is the latest move by the government to support SMEs, seen as a key part of plans to diversify the economy away from oil.

“Jada is the first instrument of its kind in the Kingdom,” the PIF said in a statement.

“It is a catalyst for small and medium enterprises, seeking to secure rewarding incomes, to ensure financial sustainability and support the Kingdom’s priorities in terms of backing small and medium enterprises,” it added.

The PIF said in 2017 it expected the investments to create 2,600 jobs and contribute 400 million riyals to gross domestic product by the end of 2020.

Those figures are expected to rise to 58,000 jobs and 8.6 billion riyals to GDP by the end of 2027. Saudi Arabia’s Vision 2030 blueprint for economic and social reform aims to increase the contribution of the SME sector to overall GDP to 35 percent from 20 percent.

The government also wants financial institutions in the Kingdom to allocate up to 20 percent of overall funding to SMEs.

On Wednesday, Jada concluded partnership agreements with six investment funds this year, aiming to pump financing into emerging companies operating in the technical and entertainment sectors that are in line with the Kingdom's 2030 vision.

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