Saudi tech SMEs can get up to $4 million in loans
Initiative aims to ensure sustainable development of IT sector in the Kingdom
For entrepreneurs who plan to start up their tech businesses, this is the right time to materialize their plans.
Saudi Arabia’s National Information Technology Sector Development Program (NTDP) on Wednesday launched an initiative to provide loans of up to SR15 million ($4 million) for micro, small, and medium-size businesses related to IT and digital projects in the Kingdom, SPA reported.
The initiative “Technology Growth Financing” has been launched in partnership with the Kafalah, a program to support micro, small and medium-size businesses.
It aims to enable the growth and sustainable development of the IT sector in the Kingdom. Under the program, small and medium enterprises can obtain loans ranging from SR100,000 ($26,662) to SR15 million to carry out projects and expand existing operations.
The program will also serve as a guarantor for the companies to help them obtain funds from financiers. The initiative will also help boost the local content in the sector and enable young Saudis to implement their innovative ideas.
Companies can apply for loans directly from the participating banks and financing agencies or use the option available on the
Monshaat online portal, according to an official statement. Within a relatively short space of time, the Kingdom’s startup ecosystem – particularly in the tech arena – has matured quickly and dramatically.
Whereas the KSA’s pre-2016 startup funding rate was about $8 million per annum, that figure leapt to just over $150 million in 2020 (a 35 percent year-on-year increase) and is seeing exponential growth in 2021, according to business research firm Magnitt.
Kholoud Al-Mohammadi of Impact46 (a Riyadh-based venture capital and private equity firm) earlier told Arab News there are two main drivers behind this shift. “First, you have consumer adaptation to technology. And the second element is the change in regulations and the support of regulatory bodies.” On the consumer side, the Kingdom has a young, tech-savvy population with a big appetite for online services — making it attractive for marketeers. In terms of regulatory changes, a key aspect of Vision 2030 is the empowerment of entrepreneurs.
Foreign direct investment has been eased and 2018 saw the launch of the Monshaat-backed Saudi Venture Capital Co. and the PIF’s Jada fund of funds.
Among Saudis surveyed for a GEM report, 90 percent agreed or strongly agreed it is easy to start a business, placing the Kingdom in top position among GEM economies. Saudi Arabia also reported the highest rate of market confidence, with 80 percent seeing opportunities to start a business as a result of the changes brought about by the pandemic.