Kafalah Enhances Saudi Arabia’s Export Sector
Kafalah, a key player in Saudi Arabia’s financial sector, has recently taken a significant step in enhancing the country’s export sector.
This advancement comes through a partnership with the Saudi Export-Import Bank. It is a significant step in diversifying and promoting Saudi exports.
Collaboration with Saudi Export-Import Bank
The partnership between Kafalah and the Saudi Export-Import Bank introduces a finance guarantee product specifically for the export sector. This initiative aims to boost Saudi exports, making them more competitive in the global market.
The collaboration is notable for offering specialized support to the beneficiaries of the Kafalah program. It included lower fees and higher coverage than standard options, catering to establishments throughout Saudi Arabia.
Strategic Targeting, Impact
The Kafalah program, under this new product, strategically targets sectors identified by the Saudi Export-Import Bank. It aligned with the national guide for economic activities set by the Ministry of Commerce.
Empowering SMEs, Vision 2030
A key aspect of this program is its focus on empowering small and medium-sized enterprises (SMEs).
Kafalah’s CEO, Mr. Homam Hashem, emphasized the significance of this agreement in enabling Saudi exporters and manufacturers, particularly SMEs.
The program offers rapid and competitively priced financing, which importantly, doesn’t require collateral.
Additionally, Engineer Saad Al-Khalb noted the agreement’s role in supporting Vision 2030’s objectives, primarily driving the export sector’s quality contribution.
Broader Impact, Growth of SMEs
The collaboration between Kafalah and the Saudi EXIM Bank is set to foster SME growth in export endeavors. It’s expected to broaden the financing outreach to a wider spectrum of SME exporters. It enhanced benefits like reduced fees and increased coverage. This initiative aligns with Vision 2030, where SMEs are projected to contribute 35 percent to the nation’s GDP.
Kafalah’s Role in Economic Development
The Kafalah program’s support has led to robust growth in entrepreneurial activity. The total number of registered firms reaching 1.2 million by early 2023. This includes more than 88,000 new businesses established in the first quarter of 2023.
It marked a 4.8 percent increase from the previous quarter and a 179 percent growth since 2016.
Vision 2030, Future of Saudi Economy
Kafalah’s efforts are in line with the Kingdom’s bold initiatives to develop its economy and reduce dependency on oil. This aligns with Vision 2030’s goals, which focus on developing SMEs and supporting entrepreneurs through private and public sector cooperation.
Historical Success, Future Goals
Since 2006, Kafalah has provided over SR17 billion to 8,500+ SMEs. Initially aiding 36 SMEs, it now supports thousands. Kafalah offers financial aid and training, aiming to increase SMEs’ GDP contribution from 20% to 35%. This marks Kafalah’s significant impact in Saudi Arabia, especially for young entrepreneurs.
Kafalah’s partnership with Saudi Export-Import Bank highlights its key role in advancing the export sector and SMEs. Crucial for the Kingdom’s economic growth and diversification, this cooperation aligns with Vision 2030’s goals. Kafalah’s ongoing efforts are vital for Saudi Arabia’s economic future.
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