FGP raised to 80% for SMEs, announces Al-Assaf

Dr Ibrahim Al Assaf, The Minister of Finance announced here last night the decision to increase Finance guarantee for Small and Medium Enterprises (SMEs) to 80 percent for all existing and new enterprises to the maximum of SR 1.6 million for a single enterprise, and hike the maximum limit of total guarantees of sole proprietorships to SR 5 million, and companies to SR 10 millions.
Dr Al-Assaf made this disclosure at an honoring party held in Al-Faislayiah Hotel, where he pointed to the amendment for the definition of SMEs as business entities whose annual sales do not exceed SR 30 million riyals, instead of SR 20 million that had been endorsed earlier.
The Finance Guarantee Program (FGP) is one of the Saudi government's initiation to support small and Medium Enterprises (SMEs), the Minister said, reiterating the importance of such business entities for their pivotal role in the developing economy as well as the developed economy. As SMEs represent 85 percent of the enterprises in the Kingdom, the Minister highlighted the benefits of SMEs in providing job opportunities, achieving goals of parallel development, enhancing the growth of the middle class in society, contributing to facilitation of goods and services provision.
Dr Al-Assaf also said SMEs is working to stimulate innovation and development, development of industrial skills and creation of a generation of administrative and technical cadres to serve all sectors of the economy.'Funding problems along with Risk guarantee (a tangible security) are the most prominent obstacles in the face of SMEs progress,' he said.
Dr. Al-Assaf pointed out that FGP is one of the pioneering ideas to overcome SMEs funding obstacles, and that it has been administered by The Saudi Industrial Development Fund (SIDF) since FGP's inception five years ago.'Moreover, Credit Guarantee Program is one of the solutions which will contribute in prompting banks to provide credit facilities for a broader-spectrum of the economically viable enterprises to play their role in the national economy. FGP was the missing link between SMEs owners and finance institutions, Dr. Al Assaf said at the event organized to celebrate the most supporters of the FGP program at King Faisal Hall.
The program has achieved rapid growth in the number of guarantees granted in the last two years, bringing the total number of guarantees to 1, 250, he said.
'The Saudi Credit and Savings Bank is one of the most important mechanisms provided by the Government to support small, medium and emerging enterprises.'The Bank's capital is now increased to SR 36 billion, after the Custodian of the Two Holy Mosques, King Abdullah Ibn Abdulaziz decreed a month ago to raise the appropriation to SR 20 billion added to the sum of SR10 billion deposited earlier for the benefit of the Bank, a move that will enable the bank to focus more on the financing of such business entities in addition to its primary role in providing social loans and encouraging private sector initiatives in this area.