Saudi bank EXIM allocates $146 million in 2022 to SMEs to boost exports

JEDDAH: The Saudi Export-Import Bank allocated approximately SR250 million ($66.6 million) to small and medium enterprises in the first quarter of 2022 and plans to allocate SR300 million by the end of the year , representing a total subsidy of SR 550 million.

“About 42% of our customers are currently SMEs. Since the establishment of the bank until the end of 2021, we have approved over SR 1.2 billion for them,” Saad Alkhalb, CEO of Saudi EXIM Bank, told Arab News.

The bank on April 19 signed a tripartite memorandum of understanding with Monsha’at and the International Islamic Trade Finance Corp. to launch an export support program for SMEs.

“With this MoU, we expect to release SR300 million in the latter part of 2022,” he said on the sidelines of the MoU signing event.

Established in February 2020, Saudi EXIM Bank provides export financing, guarantees, credit insurance and other services to build confidence in foraying into new markets. The institution also aims to minimize risk and add value to the Kingdom’s international trade.

Capacity Building

The bank will organize a workshop for SMEs during the third quarter of this year, where it will identify suitable companies and accelerate their export potential.

“The criterion is their products. If they have the right products, they will be encouraged to export and grow,” added Alkhalb.

The MoU also aims to accelerate the digital transformation of targeted SMEs to enhance their export capacities and provide indirect financing by offering insurance, products and financial guarantees.

“The MoU will also encourage Sharia-compliant SMEs in Saudi Arabia to access new markets,” Hani Sonbol, CEO of the International Islamic Trade Finance Corp., told Arab News.

Sonbol also plans to roll out new products and services for SMEs in the Kingdom.

“We will provide many products to support this crucial sector, which accounts for almost 85% of the Kingdom’s economy,” Sonbol said.

Make projects bankable

The agreement will cover areas that will enable SMEs to access funds from financial institutions and submit bankable projects.

According to Sonbol, SMEs need capacity building. Some need expertise. Some need more training in certain areas. “We will also support them with advisory services. We are signing this essential agreement to support SMEs as part of the Kingdom’s 2030 master plan to support export diversification towards the non-oil sector,” he added.

In addition to offering training and consulting services, Monsha’at will also distribute coupons to help SMEs obtain financial assistance to overcome overhead costs.

“The deal will eventually give them access to finance when they decide to approach international markets,” Abdulrahman Alotaibi, director of Monsha’at, told Arab News. The initial agreement was signed on April 19 in Jeddah in the presence of Saudi Minister of Commerce Majid Al-Qasabi, who is also Chairman of the Board of Monsha’at and Minister of Industry and Mineral Resources Bandar Al -Khorayef. , who is also Chairman of the Board of Saudi EXIM Bank.

Saudi banks and finance companies have been on a lending spree over the past few years, with the two collectively extending loans worth SR200.3 billion to the MSME sector in Q3 2021, compared to SR175.7 billion in the third quarter of 2020, the Saudi Central Bank, or SAMA, had revealed earlier.

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