SMEs in Saudi are Accelerating the Economy

Last year saw a great increase in the number of SMEs in Saudi Arabia. By the end of the last quarter of 2022, Saudi reported that the number of small and medium enterprises in the country reached around a million. It is very evident that this continued growth in the number of SMEs is attributed to the SME-centric policies by the government, in line with Vision 2030, and the focus on growing the non-oil sector of KSA.?

Even during the pandemic, SMEs in Saudi continued to flourish, keeping the Saudi Arabian economy on track. This is credited to the constant support provided by the visionary leadership of King Salman and Crown Prince Mohammed bin Salman.?

It looks quite evident that SME growth has proven to be a catalyst in enhancing the non-oil economy sector and Saudi Arabia’s economy is growing hand in hand with SMEs of the Kingdom.?

Role of Monsha’at in Strengthening SMEs

The Small and Medium Enterprises General Authority of Saudi Arabia, or Monsha’at, is providing constant support to aid the growth and establishment of SMEs in the country.?

Monsha’at provides various tools that help SMEs develop a wholesome approach. There are business incubation platforms, co-working spaces, and other business accelerators, then there are direct and indirect lending initiatives for growing startups, as well as the provision of government fee refunds.?

Monsha’at believes that if SME development is well supported, the rate of unemployment might reduce significantly and the goals set in Vison 2030 of reducing unemployment to 7% from the current 11.6% might be smoothly met.?

SME Growth Numbers

The number of SMEs has been significantly growing for the past couple of years. 2022 saw an overall increase of 25.6% from the last quarter of 2021. By June 2022, the number of SMEs reached a total of 892,063 and by the fourth quarter of 2022, the reported number of SMEs reached almost a million, 978,445 to be precise.?

This growth is being credited to access to capital and upskilling and training people to grow their entrepreneurial spirits.?

If VC funding figures are to be looked at, the phenomenal increase in them is quite evident. The regulatory strategies and digital economy initiatives by the government have drawn the major attention of venture capitalists. By the first three quarters of 2022, a total of SAR 3.1 billion was recorded with a 93% year-on-year increase.?

Importance of Fintech in SME Growth

Saudi Arabia has been a pioneer of Fintech growth in the Middle East. The sector has not only been helping SMEs receive quicker and more innovative funding options but Fintech is also attracting some great funding to the nation. Q3 of 2022 saw a 266% year-on-year increase in Fintech investment with 22 deals being closed.?

Innovative Fintechs like Lamaa are working to launch digital products that benefit Saudi-made SMEs. Lamaa’s Dynamic Discounting has been doing the rounds when it comes to helping SMEs of the Kingdom access quicker funds and develop better cashflows and working capital for faster business growth.?

Riyadh and Makkah Top the List of Desirable Locations?

According to SME Monitor, a report on SMEs by Monsha’at released at the beginning of the third quarter of 2022, Riyadh and Makkah hold 35.4% and 21% of the Kingdom’s total number of SMEs.?

When we look at Fintech numbers, 2022 saw a humongous rise in the number of Fintechs while 79% of them were headquartered in Riyadh.?

Word from Lamaa

Lamaa is a pioneer Fintech in the B2B Trade Finance sector. Lamaa also went on to become the first Shariah Compliant Fintech in that space in 2022. Headquartered in Riyadh, Lamaa focuses on innovative fintech solutions for SMEs and Enterprises alike. Our Dynamic Discounting product is currently being used by top enterprises of the nation and our vision aligns with Vision 2030, which focuses on bringing Saudi Arabian companies on the global map.?

To know more about our products and offerings, please visit www.lamaa.sa