June 6, 2023
Banking International

Saudi Arabia’s Social Development Bank loans $770m to SMEs and startups in Q1 2023

Saudi Arabia’s Social Development Bank has provided over $770 million in financing to more than 30,000 small businesses, startups, and self-employed individuals during the first quarter of 2023. The bank offered loans worth $260 million to 2,000 small enterprises and startups, while over 9,000 individuals received social financing valued at $143 million.

In addition, the bank provided $372 million in loans to over 23,000 self-employed business owners and productive families. The initiative aligns with the goals of Vision 2030 to strengthen the non-oil private sector.

In an interview, Sultan Al-Hamidi, the chief business officer of SDB, stated that the bank has financed SR5 billion to 9,000 SMEs in 2022. He also emphasized that Saudi Arabia presents a promising growth prospect for small businesses and has a higher success rate among entrepreneurs than global averages.

Since its inception, the bank has lent around SR16 billion to 40,000 SMEs and micro-SMEs, following a meticulous screening process. Additionally, the bank disperses funds in installments to ensure entrepreneurs properly execute their business plans.

Al-Hamidi mentioned that the bank provides training to entrepreneurs and helps them conduct feasibility studies.

After the initial screening and approval process, the Social Development Bank disburses loans to SMEs in installments. The first installment is given once the feasibility study is completed and the bank verifies the entrepreneur’s capabilities. The bank then conducts regular follow-ups, with another 25% of the loan disbursed after six months, and subsequent interactions over two years to ensure that the entrepreneur is executing the business plan as submitted.

The Social Development Bank is recognized as a leading government institution that provides funding for economic and social development projects to citizens in Saudi Arabia. Since establishing a dedicated segment for SMEs and micro-SMEs in 2008, the bank has provided around SR16 billion to over 40,000 such institutions.

Sultan Al-Hamidi, the chief business officer of SDB, emphasized that the bank conducts thorough screenings and provides training to ensure that entrepreneurs are well-prepared and capable of executing their business plans. He also noted that the Kingdom offers strong growth opportunities for SMEs and has a higher success rate among entrepreneurs compared to global figures.

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