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 Small & Medium Enterprises Loan Guarantee Program

Small and Medium Enterprises (SMEs) Loan Guarantee Program (KAFALH)

 

The SMEs Loan Guarantee Program (KAFALAH) has maintained its ongoing key role in supporting small and medium enterprises Kingdom-wide with the aim of expanding the beneficiaries' base and creating new job opportunities to reduce unemployment rates in the Kingdom.

During the FY 1437/1438H (2016), KAFALAH Management approved 3,390 guarantees in contrast with 4,007 guarantees in the preceding year, a decline rate of 15%. These approved guarantees have benefited 1,711 SMEs compared to 1,643 SMEs in the preceding year, representing an increase of 4%. The value of these guarantees totaled SR 1,828 million compared to SR 1,820 million in the preceding year, representing a slight growth of 0.4%. Credits provided by KAFALAH's participating commercial banks to SMEs during the year amounted to SR 3,557 million in contrast with SR 3,723 million in the preceding year, a decrease of approximately 4%.

 

The Construction/Building and Contracting sectors led all other sectors with 1459 enterprises benefited from guarantees at a value totaled SR 653 million, representing 43% of the number of guarantees and 36% of their value during the FY 1437/1438H (2016). The Commercial Sector came second with 1004 guarantees with a value of SR 602 million, accounting for 30% of the number of guarantees and 33% of their value, followed by the Manufacturing sector with 284 guarantees (SR 192 million) representing 8% and 11% of the number and value of guarantees respectively. The Finance and Business sector comes next with 272 guarantees with a value of SR 134 million (8% and 7% of the number and value of guarantees respectively). The remaining 371 guarantees with a value of SR 247 million (11% and 13% of the number and value of guarantees) were distributed among different sectors including the Recreation and Tourism (180), Public, Individual and Social services (117), Transport, Warehousing and Cooling (40), Electricity, Gas, Water and Related Businesses (18), Mining, Petroleum and Related Businesses (11), and Agriculture, Fisheries and Related-Businesses (5). 

        

In pursuance of its aim of achieving balanced regional development, the Program Management has been keen to ensure optimal use of KAFALAH guarantees in  all administrative regions Kingdom-wide.  The Riyadh Province came first in terms of the number of enterprises and value of guarantees issued by the Program during the reporting year with 1399 guarantees with a value of SR 735 million. The Eastern Province came second with 720 guarantees (SR 433 million), followed by Makkah Province with 698 guarantees (SR 380 million), Qassim Province with 117 guarantees (SR 74 million), Madinah Province with 157 guarantees (SR 62 million), Aseer Province with 86 guarantees ( SR 49 million), Najran Province with 82 guarantees (SR 33 million), and finally the other provinces with 131 guarantees (SR 62 million) including Baha (28),  Jouf (23), Jazan (30), Northern Boarders (15), Tabouk (10) and Hail (25). It is worth observing that the Program's guarantees issued during the FY 1437/1438H (2016) have covered all the Kingdom's provinces.

 

As for KAFALAH participating banks, the National Commercial Bank (NCB) led all other participating banks with a number of 1,344 guarantees with a value of SR 529 million, representing 40% and 29%of the total number and value of guarantees respectively. Riyadh Bank comes second with 625 guarantees (SR 427 million) representing 18% and 23%of the total number and value of guarantees respectively, followed by Al-Rajhi Bank with 391 guarantees (SR 302 million) representing 12% and 17%of the total number and value of guarantees respectively, and Arab National Bank (ANB) with 339 guarantees (SR 158 million) representing 10% and 9%of the total number and value of guarantees respectively. The remaining number of 691 guarantees (SR 412 million) was distributed among the other banks, representing 20% and 22%of the total number and value of guarantees respectively.

 

Since its launch in 1426/1427H (2006G) until the end of the FY 1437/1438H (2016), KAFALAH has issued a total of 18,289 guarantees to 8,933 SMEs with a total value of SR 8,925 million, in contrast with the total approved financing of SR 17,929 million.

During the year 1437/1438H (2016), 47 guarantees were liquidated at a value of SR 30.4 million in favor of KAFALAH participating banks, increasing the number of liquidated guarantees, since SIDF inception until the end of the FY 1437/1438H, to 184 with a total value of SR 100.8 million. Distribution of liquidated guarantees is as follows: 61 guarantees for NCB, 47 for Alrajhi Bank, 19 for SABB; 15 for Riyad Bank, 13 for Alawwal Bank, 9 for Arab National Bank, 6 for each AlJazira Bank and Saudi Investment Bank, 4 for Bank Albilad, 3 for Saudi French Bank Arab Bank, and one for the Samba Financial Group. The liquefied guarantees disbursed by the Program accounted for 1.01% and 3.8% of total number and value of the guarantees issued over the period from KAFALAH's launch until the end  of the FY 1437/1438H.  


 

Number and Value of Approved Guarantees and Beneficiary Enterprises

by Commercial Bank Creditors (SAR thousands)

Bank Approved Guarantees 2016 GTotal Since Launch of the Program
Number of GuaranteesSR 000
Number of Beneficiary Enterprises
Number of GuaranteesSR 000
Number of Beneficiary Enterprises
Value of GuaranteesValue of FinanceValue of GuaranteesValue of Finance
National Commercial Bank (NCB)470529,4261,199,8621,3442,7352,755,6395,953,3207,750
Riyad Bank409426,561846,3046252,2602,090,9444,272,4243,408
Al-Rajhi Bank247301,525539,3393911,1531,174,9532,074,1981,968
Arab National Bank (ANB)237157,938265,207339925868,7022,134,0621,951
Al-Jazira Bank117132,212175,062200349414,617565,401694
Bank Albilad6275,535183,329106267275,960602,954405
Saudi Investment Bank3846,12082,34188134160,580297,028291
Alawwal Bank3742,97166,77250457535,452802,678558
Saudi French Bank3746,53875,49441172193,973383,651222
SAMBA Financial Group2937,09368,050136290290,895537,762732
Saudi British Bank (SABB)2427,07048,60063187158,922298,125303
Emirates NBD33,4405,000633,4405,0006
Alinma Bank11,3602,000111,3602,0001
TOTAL 1,711 1,827,789 3,557,360 3,390 8,933 8,925,437 17,928,603 18,289