Monsha’at says bank of SMEs to provide digital products, services

The Small and Medium Enterprises General Authority (Monsha’at) launched the bank of small and medium enterprises (SMEs) as one of the development funds and banks of the National Development Fund (NDF).

The bank will focus on providing all its products and services in digital form without establishing branches, the Saudi Press Agency (SPA) reported.

It will also contribute to the delivery of services to all regions, as it will focus on implementing international best practices in cooperation with international and local partners, aiming to build a suitable product portfolio for every segment of SMEs.

The bank’s establishment is based on a benchmarking study of 14 countries to seek best practices in supporting SMEs financing, analyzing the current situation, and identifying the financing gaps.

The bank’s launch is in line with Monsha’at’s national strategy for SMEs that includes 16 basic initiatives and nine pivotal initiatives, one of which was establishing the bank. The three specific initiatives form the bank’s core: the indirect lending initiative with a capital of SAR 1.6 billion, the establishment of the Saudi Venture Investment Co. with a capital of SAR 2.8 billion, and raising of Kafalah program’s capital to SAR 1.6 billion.

The bank of SMEs aims to raise the financing provided to the SMEs sector, bridge the financing gap, enhance the contributions of financial institutions in providing innovative financing solutions, and achieve financial stability for the sector.

The bank will be an umbrella for all financing solutions, including lending and capital financing, financing guarantee, and alternative financing.

Among the most prominent features of the bank is providing credit products on competitive terms that serve all sectors, using technology in the lending process, in addition to providing guarantees that suit the segment of micro, small and medium enterprises (MSMEs), increasing the enterprise’s ability to obtain financing, and supporting awareness efforts and non-financial services to empower enterprises.

According to data compiled by Argaam, Saudi Arabia’s Cabinet gave the go-ahead on Feb. 16, for setting up a SMEs bank.