(MENAFN - Arab News) Kafala Program approved 317 funding guarantees for small and medium enterprises (SMEs) in the first quarter of 2012 compared to 222 guarantees same period last year, an increase of 43 percent.
Value of the guarantees totaled SR179.7 million compared to SR82.5 million, an increase of 118 percent.
Kafala Program is an agreement between the Ministry of Finance, represented by the Saudi Industrial Development Fund (SIDF) and Saudi banks, which aims to promote financing to SME firms within the Kingdom of Saudi Arabia.
According to the program, the bank will offer finance to customers up to SR2 million, and simultaneously, the SIDF-Kafala Program will issue a guarantee to the bank, covering up to 80 percent of the financing amount.
The Saudi banks provided funding facilities worth SR331.9 million in Q1 2012 compared to SR230.8 million, a growth of 44 percent.
The National Commercial Bank (NCB) topped the list of banks mostly providing guarantees to the SMEs in Q1, 2012 and captured 28 percent of overall guarantees followed by Riyadh Bank and Arab National Bank (ANB) by 19 percent for each, Al-Rajihi Bank (16 percent), and other banks (18 percent).
Contracting sector received 48 percent of total guarantees approved by Kafala Program, followed by service sector (24 percent), industrial sector (17 percent), commercial sector (7 percent), and other sectors (4 percent).