Kafalah: Saudi Leading Loan Risk Guarantee Program Continues to Achieve Vision 2030 Goals

Saudi Arabia’s Kafalah Program — the leading loan risk guarantee program in the Kingdom and one of the largest loan risk guarantee programs in the region — continued its achievements in full alignment with the goals of Vision 2030.



The program was established in 2006. The partial guarantee scheme guarantees up to 80 percent of the loans to SMEs by banks in case of default.


Since its inception, Kafalah has guaranteed bank loans to 45,000 SMEs, of which 80 percent are in the construction, trade, and services sectors.


In March 2023, Kafalah Program received three awards in the 2022 Middle East & North Africa Stevie Awards. It won the Award for Innovation in Business-to-Business Products,

for its Secured Financing Product.


Kafalah also won the Most Valuable Government Response award for its Initiatives for SMEs and the Most Valuable Product award for the Secured Financing Initiative Product.



According to Kafalah CEO Homam Hashem, Saudi Arabia’s Small and Medium Enterprises Financing Guarantee Program, Kafalah, has exceeded SAR 64 billion ($17 billion) in the total loan portfolio, of which SAR 42 billion was guaranteed.


the program is also being restructured to improve its focus on specific sectors (e.g. tourism) and regions as well as its operational efficiency.



Hashem revealed in 2022 that the total facilities funded by banks and finance companies issued by the Saudi Central Bank, or SAMA, amounted to SAR 203 billion in the fourth quarter of 2021, according to Hashem.


He indicated that the program guarantees a minimum of 12.4% of this portfolio by targeting SMEs. Kafalah reached 22% of small enterprises, and 9% of medium- and small-sized enterprises.


Kafalah offers approximately 12 products to support enterprises, including the high Saudization program, supply chains, technology, and more.


The Kafalah program covers several business sectors, including wholesale and retail trade, catering and hotels, manufacturing industries, and administrative and support services.

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