Arab News, Mon, May 27, 2024 | Dhu al-Qadah 19, 1445
SME financing in Saudi Arabia surges 20.4% in Q4 of 2023
Saudi Arabia:
Financing provided to small and medium enterprises in Saudi Arabia surged by
20.4 percent year on year to $73.5 billion in the fourth quarter of 2023,
official data showed.
In its latest quarterly report, the Kingdom’s
Small and Medium Enterprises General Authority said that credit facilities
provided to micro and SMEs amounted to $6.7 billion and $24.6 billion,
respectively, in the last three months of 2023.
On the other hand, medium enterprises in the
Kingdom secured finance worth $42.2 billion in the last quarter of the previous
year.
The authority, also known as Monsha’at revealed
that banks in Saudi Arabia provided credit facilities worth $68.9 billion in the
fourth quarter of 2023, representing a rise of 21.1 percent compared to the same
period of the previous year.
On the other hand, finance companies in the
Kingdom provided loans amounting to $4.6 billion in the last three months of
2023, marking a year-on-year rise of 9.3 percent.
Developing the SME sector is crucial for Saudi
Arabia as the Kingdom is currently on a path of economic diversification, as it
steadily reduces its dependency on oil.
The report revealed that 9,644 SMEs were
benefitted from Monsha’at support centers in the first quarter of this year.
Moreover, three SMEs had their initial public
offering on the parallel market Nomu through the Tomoh program in the first
quarter of 2024.
Monsha’at also revealed that Saudi Arabia led
venture capital funding in the Middle East and North Africa region with $240
million deployed across 35 deals in the first quarter of this year.
“With $240 million deployed across 35 deals to
Saudi-based companies, the Kingdom accounted for a remarkable 65 percent of all
VC funding in the region,” said the authority.
The report attributed 54 percent of this VC
funding to the $130 million pre-initial public offering secured by Salla in
March.
“While the $240 million invested in the first
quarter maintains the Kingdom’s dominance, it did reflect a considerable
quarterly drop of 70 percent from the fourth quarter of 2023, along with a 42
percent year-on-year drop. This downturn mirrors the broader trend across the
MENA landscape,” said Philip Bahoshy, founder and CEO of venture capital data
platform MAGNiTT.
He added: “Digging deeper, it becomes evident that
while the overall funding has diminished, the Kingdom’s entrepreneurial
ecosystem continues to attract investors.”