Saudi Arabia has witnessed a significant increase in the number of newly established small and medium-sized enterprises (SMEs) since the beginning of the year. A total of 127,613 new establishments have been registered, with the majority concentrated in Riyadh, accounting for 72% of the total.
According to a report by the General Authority for Small and Medium Enterprises (Monshaat), the number of new establishments has grown by 11% during this period compared to the fourth quarter of last year. The total number of establishments in the Kingdom by the end of the third quarter reached 1.27 million, with 121,700 being micro-enterprises and 564 being medium-sized enterprises. However, the number of small enterprises decreased by 3% to reach 4,686 establishments.
Riyadh, being the capital city, received the highest number of new establishments, reaching 91,500. This is not surprising considering the region’s availability of opportunities and attraction of capital investments. The growth rate of new establishments in Riyadh since the beginning of 2023 has exceeded 20%, surpassing the growth in the entire Kingdom.
Although Riyadh experienced fluctuating quarterly growth in the number of establishments throughout the year, starting at around 8% in the first quarter and ending at approximately 6% in the third quarter, the annual growth compared to the previous year remains exceptional despite a slight decline during this period.
While the number of establishments in Makkah and the Eastern Province has also increased by 5% and 6%, respectively, since the beginning of the year, Riyadh maintains its position as the largest hub for establishments in the Kingdom with a regional distribution share of 43% and 18%, respectively, followed by the Eastern Province with approximately 10.8%.
The Saudi Small and Medium Enterprises Bank, established at the beginning of 2021, aims to increase the productivity of establishments in Saudi Arabia and raise their contribution to the local GDP to 35% by Vision 2030. This initiative is part of the larger effort to build a diversified and sustainable economy that contributes to achieving the national goals.
The focus on supporting entrepreneurs, especially owners of small and medium-sized enterprises, has been evident through various initiatives. This has contributed to the continuous growth of this segment of establishments in the past two years.
Overall, the increasing number of new SMEs in Saudi Arabia, particularly in Riyadh, reflects the country’s thriving business environment and efforts to promote economic growth and entrepreneurship.