This publication is a research paper prepared by Dr. Randa Al-Yafi, Ph.D (Associates Professor) at College of Business Administration, Management Department, King Saud University, in Riyadh, Saudi Arabia (reviewed and approved by Kafalah GD). The research is showing some backgrounds of the SME sector and highlighting Kafalah role and achievements.
One of the primary strategic objectives of Saudi Arabia’s Vision 2030 is to transform its oil-dependent economy into a knowledge-based economy. This multifaceted effort encompasses an extensive web of interconnected projects, programs and funds geared toward accomplishing this important goal. Vision 2030 has recognized the proliferation and success of small and medium enterprises (SMEs) as a key component of Saudi Arabia’s core economic objectives: job creation, technological innovation and expanding exports. SMEs are a central pillar of the global economy and are the main drivers of employment and economic expansion. To be successful, governments must take a holistic approach to cultivating an atmosphere conducive to SMEs, and in Saudi Arabia this will require swift and decisive measures in regulation, funding, training and modernization, and internationalization. To support these aspirations, much needed regulatory, procedural and practical reforms have occurred at an exceptional rate. One keystone in the Saudi Arabian government’s efforts to support SMEs is the SME Loan Guarantee Program known as the KAFALAH program, which was introduced in 2006. This paper sheds light on the features of, and efforts made by the KAFALAH program that have played a significant role in SMEs’ development and success in the country.
This report has been published with permission of member Kafalah, a finance guarantee program aiming to foster, support and develop the SME sector to contribute positively to the social and economic development of Saudi Arabia.