Riyadh Witnesses a 20.4% Surge in SME Funding to $73.5 Billion
As the last quarter of 2023 came to a close, the financial backing for small and medium enterprises (SMEs) within Saudi Arabia experienced a notable increase of 20.4 percent from the previous year, reaching an impressive $73.5 billion according to the latest data.
The Kingdom’s Small and Medium Enterprises General Authority, also known as Monsha’at, reported that micro enterprises received $6.7 billion, while small businesses obtained $24.6 billion in credit facilities during this period.
Medium-sized enterprises were not left behind, securing $42.2 billion in financing in the final quarter of 2023.
Financial institutions, predominantly banks, were responsible for extending $68.9 billion in credit, showcasing a 21.1 percent increase when juxtaposed with the same quarter of the preceding year.
Moreover, finance companies contributed a further $4.6 billion in loans, marking a 9.3 percent annual growth.
The vitality of the SME sector is underscored by Saudi Arabia’s ongoing efforts to diversify its economy and reduce reliance on oil revenues.
Monsha’at’s report highlighted that its support centers aided 9,644 SMEs in the first three months of the year.
Additionally, the Tomoh program facilitated the initial public offerings of three SMEs on the parallel market Nomu in the first quarter of 2024.
Leading the way in venture capital investments within the Middle East and North Africa, Saudi Arabia deployed $240 million across 35 deals in the region, capturing 65 percent of all VC funding in this timeframe.
A significant portion of this investment, amounting to 54 percent, was attributed to the $130 million pre-IPO round obtained by Salla in March.
Despite maintaining its leadership position, Saudi Arabia’s venture capital investments saw a 70 percent decline from the previous quarter and a 42 percent decrease year-on-year, echoing the broader downtrend across the MENA region, as noted by MAGNiTT’s founder and CEO, Philip Bahoshy.
Yet, Bahoshy emphasized the sustained investor interest in the Kingdom’s burgeoning entrepreneurial ecosystem, despite the overall downturn in funding.