According to a senior official, Saudi Arabia’s Social Development Bank plans to provide SR24 billion ($6.3 billion) in funding to small and medium-sized businesses over the next three years as Saudi Arabia gradually diversifies its economy to meet the objectives outlined in Vision 2030. In an interview on the margins of the Biban 2023, Sultan Al-Hamidi, Chief Business Officer of SDB, stated that the bank gave SR5 billion in funding to almost 9,000 SMEs in 2022. He stated that SMEs are multiplying, and the bank has responded to this. They will invest about SR24 billion over the next three years, as is only natural.
Social Development Bank And Its Efforts For SMEs in Saudi Arabia
SDB established a division for SMEs and micro-SMEs in 2008. They have successfully distributed about SR16 billion to 40,000 SMEs since that period to the present. How do they assist them, then? According to Al-Hamidi, they start with them from conception to expansion. Al-Hamidi noted that SDB is financing SMEs following a careful vetting procedure. The bank will disburse funds in installments while simultaneously monitoring how well business owners are carrying out their objectives.
He revealed that they typically begin with the idea or concept. The following stage is to conduct an interview with them and ensure that they receive excellent training for two weeks so they’re able to complete a feasibility study. The bank also operates a facility called Dulani, which opened its doors in 2016. He continued that Dulani operates as a clinic for SMEs for new and well-established businesses. The bank will give the loan as soon as they complete the feasibility study, but they won’t deploy the funds entirely.
After giving the business owner 25%, they pay a visit. After six months, they deploy another 25%. In order to ensure that they are carrying out the presented plan, they interact with the entrepreneur four times over the course of two years, according to the bank executive. Al-Hamidi asserts that this offers a significant opportunity for growth for SMEs in Saudi Arabia, where the average success rate of entrepreneurs is higher than the norm globally.
To ensure that SDP’s efforts were valuable and effective, they proceeded to examine what had happened to the businesses that they had already sponsored with the assistance of GASTAT (General Administration for Statistics). Fortunately, they have witnessed an increase in Saudization and employment; these SMEs have generated 81,000 new jobs, said Al-Hamidi. He also said 30% of these workers were women, showing that the gender gap is closing as a result of the expansion of SMEs in the Kingdom. One of the objectives of Vision 2030 is to reduce unemployment from 11.6 to 7 percent, increase the labor force participation of women from 22 to 30 percent, and increase the contribution of SMEs in Saudi Arabia to 35 percent of GDP by the end of this decade.
The Social Development Bank’s plan to invest $6 billion in Saudi Arabian SMEs over the next three years is an essential step in attaining the objectives outlined in Vision 2030. SDB’s thorough screening procedure, constant monitoring, and the Dulani facility provide Businesses in Saudi Arabia an excellent chance for development and success. Saudi Arabia is well on its way to attaining the ambitious goals set forth in Vision 2030.