(MENAFN - Arab News) The Kingdom's Kafalah program plans to reach a target of more than 10,000 small and medium enterprises (SMEs) during the next 10 years, a senior official of the project said.
Mohammed bin Abdul Moneim Hamouda, president of the program, speaking at the fourth promotional campaign at the Faisaliah Hotel, said: "At present, there are 1,390 SMEs that have benefited from the Kafalah program. The number will be doubled next year because of the encouragement given by the program to develop this sector."
The program is a collaboration between the Ministry of Finance, represented by the Saudi Industrial Development Fund (SIDF) and Saudi Banks, which aims to promote the financing of SMEs across the Kingdom.
The 11 participating banks under the program include National Commercial Bank, Riyad Bank, Arab National Bank, Al Rajhi Banking and Investment, the SABB, Samba Financial Group, Banque Saudi Fransi, Saudi Hollandi Bank, Bank Al Jazira, Bank Al Bilad and The Saudi Investment Bank.
Helping SMEs to obtain Islamic finance for developing and expanding their activities, participating in the competitive abilities of local enterprises that will be positively reflected in the local economy, and supporting the enterprises to produce innovative high quality products and services are among the program's objectives.
Talat Zaki Hafiz, secretary general of Saudi Banks, said the program offered a financial guarantee of up to 80 percent to a bank to obtain funds banking and financial sources. This is to encourage the establishment of more SMEs.
"Earlier, we offered only 50 percent and now are offering 80 percent guarantee in anticipation of the participation of more SMEs in the economic development of the country," Hafiz said.
So far, he added, SR2 billion has been granted to SMEs under the program since its launch in 2006.
"We have attached a lot of importance to this project since 80 percent of the jobs are created by SMEs," Hafiz said, adding that the SMEs could cover all the sectors in the Kingdom.
Mohamed Al-Rabiah, media coordinator of the program, called for generating interest in establishing more SMEs.