Saudi MSMEs see 16% growth in credit offerings in 1st quarter

RIYADH: Credit facilities provided to micro, small, and medium enterprises in Saudi Arabia saw an annual rise of 16 percent in the first three months of 2024, according to recent data.

Figures from the Kingdom’s central bank, known as SAMA, indicated that borrowing lines allocated to this sector totaled SR293.43 billion ($78.25 billion), up from SR252.02 billion in the first quarter of 2023.

According to SAMA data, Saudi banks extended 94 percent of these credit facilities, with the remaining 6 percent granted by finance companies. 

Medium enterprises received the majority share of the sector’s total granted facilities at 55 percent, amounting to SR160.6 billion, with the most notable annual growth observed in small companies, which saw 32 percent increase to reach SR103.5 billion.

Credit extended to micro enterprises, constituting 10 percent of the overall share of MSME financing, increased by 30 percent during this period, reaching a total of SR29.4 billion.

Micro enterprises are characterized by revenues up to SR3 million and a workforce of no more than five full-time employees.

Small enterprises, on the other hand, exhibit earnings ranging from SR3 million to SR40 million, accompanied by up to 49 full-time workers.

In contrast, medium enterprises have revenues falling within the range of SR40 million to SR200 million, with employee numbers ranging from 50 to 249.

Saudi Arabia is heavily investing in its SMEs to diversify its economy away from oil and foster a competitive funding environment.