Financing alone is no longer enough to propel Saudi Arabia’s small and medium-sized enterprises into their next phase of growth, as their needs increasingly extend to accessing markets and contracts, securing operating liquidity, reducing business costs and boosting productivity, competitiveness and their ability to expand.
Financing available to the sector has nevertheless continued to grow. Cumulative credit facilities extended to micro, small and medium-sized enterprises reached about SAR 467 billion ($124.5 billion) by the end of 2025, up 33% year on year.
At the same time, Saudi Arabia’s National Strategy for Entrepreneurship and SMEs is seeking to address challenges beyond the financing gap by improving access to markets, procurement and supply chains, reducing the cost of doing business and strengthening companies’ capacity for sustainable growth.
In the latest financing initiative, the Small and Medium Enterprises General Authority, known as Monsha’at, signed a cooperation agreement with STC Bank in September 2026 for a financing portfolio of up to SAR 5 billion ($1.33 billion) for micro, small and medium-sized enterprises.
The portfolio includes short-, medium- and long-term facilities covering working capital, operating needs, purchases of assets and equipment, and financing for contracts, projects and supply chains.
Businesses also require more than long-term financing. The Social Development Bank’s Working Capital product offers financing ranging from SAR 150,000 ($40,000) to SAR 10 million ($2.67 million), with repayment periods of up to 12 months, to cover day-to-day operating costs and strengthen cash-flow management.
The bank distinguishes between working-capital financing for operating costs and capital-expansion financing for assets and expansion.
From financing to growth
Rayan bin Ibrahim Alfayez, Monsha’at’s deputy governor for enterprise services, said the 13 initiatives under the National Strategy for Entrepreneurship and SMEs are designed to directly address priority challenges facing business growth and create a more efficient environment that supports expansion and sustainability while strengthening competitiveness in the coming period.
Alfayez explained that one initiative aimed at expanding opportunities for businesses focuses on empowering SMEs and startups in industrial cities and special economic zones. It seeks to help them capitalize on opportunities available in those areas and provide support and incentives suited to the nature of their businesses, supporting their growth and strengthening their presence in industrial and economic activities and value chains.
He added that the strategy also includes an initiative to increase SMEs’ share of procurement by large companies, broadening their access to opportunities and contracts, strengthening their participation in supply chains and helping build sustainable commercial relationships that support business growth and expansion.
Alfayez noted that another initiative aimed at reducing the cost of doing business addresses one of the challenges affecting enterprise growth by examining fees and requirements in coordination with the relevant authorities and developing mechanisms to support fees based on carefully considered criteria. The initiative is intended to ease the financial burdens associated with doing business and create a more favorable environment for companies’ growth and sustainability.
He said the initiatives work together to address a range of factors linked to business growth, from the operating environment to opportunities, markets and value chains, strengthening SMEs’ ability to grow and expand while increasing their competitiveness and contribution to the national economy.
Markets after financing
Financial and economic adviser Hussein Al-Attas told Asharq Al-Awsat that the increase in financing directed toward SMEs reflected clear progress in Saudi Arabia’s financing ecosystem, but the challenge was no longer financing alone. Rather, it was an enterprise’s ability to turn that financing into sustainable growth.
Al-Attas explained that an enterprise needs three interconnected elements: appropriate financing, access to markets, and operational and competitive capacity.
He said a company may secure financing, but in the next stage it needs contracts and sales opportunities that allow it to increase revenue, alongside managerial and technological development to boost productivity and the ability to manage cash flows and expand without allowing growth to become a financial burden.
Al-Attas added that access to markets and contracts represents the link most closely associated with an enterprise’s transition from survival to growth. Financing gives a business the capacity to act, while contracts and markets turn that capacity into revenue and cash flow.
He further stated that greater SME participation in government procurement and the supply chains of large companies, along with opening export channels, could have a direct impact on their ability to expand, alongside efforts to reduce the cost of doing business and raise productivity.
The next phase requires moving from the concept of “financing the enterprise” to “financing the enterprise’s growth,” he underlined, meaning that financing should be linked to markets, contracts, technology, productivity and expansion.
Strategy broadens its scope
The focus on markets forms part of the wider National Strategy for Entrepreneurship and SMEs, which includes 13 initiatives addressing sector challenges in access to markets and opportunities, financing, the business environment, innovation, data and expansion.
The strategy also aims to raise SMEs’ contribution to gross domestic product to 35% by 2030 and create more than 500,000 direct and indirect jobs.
Some initiatives seek to turn market access from a broad objective into direct contracting opportunities by qualifying enterprises and connecting them with the supply chains of large companies and projects.
This approach is reflected in Monsha’at’s Jadeer service, which aims to improve businesses’ readiness, qualify them to enter supply chains and enable them to benefit from procurement opportunities.
The equation for SME growth therefore does not stop at increasing available financing. It also depends on businesses’ ability to use that financing first to fund operations, then gain access to demand and contracts, improve productivity and reduce costs before moving into expansion and investment.
This reflects a shift from addressing the financing gap to addressing the growth gap: liquidity gives an enterprise the ability to continue operating and move forward, while access to markets and operational efficiency determine its ability to turn financing into revenue and sustainable growth.
