The Small and Medium Enterprises Financing Guarantee Program in Saudi Arabia, called Kafalah, issued 5,447 assurances, increasing the financing of the small businesses by 8 percent year on year in the third quarter to SR14 billion ($3.73 billion).
The Saudi Press Agency reported that the guaranteed value was SR10.6 billion, higher by 4 percent compared to the same period in 2024. 4,384 small and medium enterprises received the services of the program.
This highlights the increasing role of the program in assisting small businesses as the Kingdom works towards the economic diversification of the Kingdom as part of Vision 2030.
According to SPA, CEO of the Kafalah program, Homam Hashem, SPA indicated that this expansion is “reflects the pivotal role of SMEs in supporting national economic growth, and their contribution to achieving the goals of the Kingdom’s Vision 2030, which aims to diversify sources of income and empower the business sector.”
He referred to Kafalah as a pioneering model of cooperation between the public and private sectors to improve access to finance and tackle business problems.
The program has been active since its launch and has, until now, approved over 71,400 guarantees worth SR89.5 billion and assisted approximately 26,500 SMEs, with the overall funding reaching SR125.3 billion.
According to SPA, entertainment-oriented SMEs have become one of the strongest in the show, and their financing growth by 98 percent year on year in the second quarter of 2025.
Kafalah also backed 32 establishments with guarantees of more than SR79 million.
The entertainment segment beneficiaries also increased by 78 percent compared to the previous year. By the close of the second quarter, 94 businesses had been financed to the tune of over SR304 million and were guaranteed by SR 225 million.
Kafalah was founded in 2006 as a non-profit government initiative that assists SMEs in getting financing to grow and develop their business. It gives financial assurance to the banks and other lenders, such that firms with challenges in getting access to credit are able to get funds.
The program works together with the SME Bank and the National Development Fund in an attempt to create a sustainable financing ecosystem to promote the growth of enterprises and diversification of the economy.
In the last five years, the program has added close to SR27 billion to the gross domestic product of Saudi Arabia, a fact that emphasizes on its contribution to the current development of the SME environment in the Kingdom.
