Saudi Arabia sees surge in credit for SMEs in 2020: SAMA


Saudi Arabia saw a surge in financing awarded to small and medium-sized enterprises (SMEs) in 2020 by the Kingdom’s banks and financial companies despite the constraints of the economic impact of the coronavirus, according to recent official data.

Figures released by the Saudi Central Bank (SAMA) in late January showed that in the third quarter of 2020 the total amount of credit awarded to SMEs was SR 176.2 billion ($46.99 billion), up from SR115 billion in Q3 2019 and SR 106.7 billion in Q3 2018. While the total figure rose 8.3 percent in 2019, it surged 52.4 percent in 2020.

Amount the four categories of companies monitored by SAMA, the biggest increase was for micro companies classed as those with less then five employees which saw an 89 percent rise in the total credit awarded to them.

The figure for small and medium companies rose by 58.9 and 48.4 percent, respectively. Small companies are classed as those with six to 49 employees and medium-sized are those with 50 to 249 staff members.

The SAMA data also showed that credit from banks accounted for 93.6 percent of credit for SMEs, with the remainder coming from other financial companies. The SAMA report said that SMEs also account for 8 percent of banks’ lending in Q3 2020, up from 5,8 percent in Q3 2018.

Commenting on the results, Wassim Basrawi, managing director for Wa’ed, the entrepreneurship arm of Saudi Aramco, told Arab News: “These new statistics confirm the growing confidence we also share at Wa’ed in the dynamic resilience that is being demonstrated by Saudi start-ups during the Covid pandemic.

Earlier this year, Wa’ed reported that it had tripled the amount of money loaned to startups in the Kingdom last year. The Dhahran-based initiative gave out 12 loans to small and medium-sized enterprises (SMEs), up from four in 2019, with the value surging to SR31 million, up from SR10 million in 2019. In venture capital funding, Wa’ed deployed SR43 million to SMEs, up 34 percent year-on-year.

“In 2020, we also experienced rising demand for our loan, venture capital and incubation services at Wa’ed . . . The demand was there . . . We are doing this because we have full confidence and trust in our entrepreneurs and are deeply committed to supporting new ideas, solutions and products that fill critical gaps in the Kingdom’s economy and promote economic diversification.”

Basrawi also confirmed that Wa’ed is planning to double its deal volume over the next three years to meet this increasing demand for financing by SMEs. Since Wa’ed was established in 2011, it has deployed more than SR375 million startups in the Kingdom.—AN

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