SMEs contribution towards economy still low in Saudi Arabia

Small and Medium Enterprises are the backbone of any modern economy. They employ 80% of the people. They contribute to the economy. 

Ahmed M. Al-Ghannam, Director General of Saudi Export Program talks about the role of SMEs in the economy of Saudi Arabia.

He says, “I always believe that SMEs are and should be the driving force of any nation. If you compare the contribution of the SMEs between the developed and the developing countries, you will see the difference. In developed countries like United States and in some emerging economies like Turkey and India and China, you see the contribution of SMEs towards the GDP is very high, some even exceed over 80%. Where as in developing countries, it is very slow. In the last 4 to 5 years, Saudi government is focusing more on developing SMEs. We have many programs that offer finance and guarantees. We, at the Saudi Export Program, have paid attention to this important fact. One of the conditions in our terms is that we can export finance for nearly 100, 000 dollars. This means that we can really help those small exporters. So, we are reaching out to offer the benefit of our facilities to as many SMEs as possible. We also help them through other procedures in the Saudi Export program. We have fast-track procedures that help the SMEs to finish their application in the Saudi Export Program within a week to 10 days. This really goes in line with the government objective in focusing on the SMEs, because we believe that they have a major role to play in the economy. Also, they are one of the main sectors that can absorb the labor force in Saudi Arabia.”

SFD is the main channel of Saudi Arabia in extending concessional aid to developing countries, the main objective is to promote and help developing country specially LCDs. to grow and develop by financing infrastructure project. SEP is the new window of SFD. Which promote Saudi export and Saudi trade; it has many instruments and tools in its promotion like many other ECAs and Exim. Banks, SEP provide the financing, credits and guarantees to Saudi exporters; it also help banks to engage more in financing Saudi trade and export. All these facilities are provided in commercial terms. SEP strategy has three main elements. First to maintain growth in our operation this means more Saudi export. Second to diversify and develop our support tools to Saudi non crude oil exports, this means meeting all needs of Saudi export whether it is financing guarantees or marketing. Third to contribute in achieving the main object of the 10th development plan of Saudi Arabia, which is helping in diversifying our economy and not be solely dependent on exporting crude oil. This means increasing the added value to national economy and employing more local capitals, more labor technology and national resources.