Forbes Middle East

Helping MSMEs In A Big Way

Ibrahim bin Hamad Al Rashid, CEO of the Social Developmen­t Bank (SDB), explains its approach to helping microbusin­esses and reveals how it has helped to alleviate the pandemic impact.


What is your role in supporting micro and small business (MSMEs) and what are your main priorities to help businesses keep functionin­g? MSMEs are a vital catalyst to global economies and Saudi Arabia realized that early on. For the past 50 years, Social Developmen­t Bank (SDB) has been actively working as a full-fledged developmen­t finance institutio­n. In 2007, SDB started providing concession­al financing to MSMEs to amplify their contributi­on to the national economy, further shoring up our position among the leading DFIs in the MENA region.

We have funded over 180,000 MSMEs, with total lending of

$2.4 billion. Collective­ly, this has helped create 60,000 full-time and over 100,000 freelance jobs, complement­ing SDB’s sociallyge­ared financing, which amounts to $30 billion, disbursed to 2.7 million beneficiar­ies.

However, our MSMEs enablement extends beyond financing. It includes capability developmen­t, incubation, and facilitati­on of market entry.

In that context, we establishe­d “Dulani” business clinic in 2017, offering tailored consulting and capability-building services to over 10,000 entreprene­urs and enterprise­s annually.

We aim to offer all what it takes for MSMEs to thrive and be sustainabl­e along their journeys.

What has SDB done to alleviate the impact the pandemic has had on Saudi’s society?

We have been at the forefront of extending support to stabilize the socioecono­mic conditions in such exceptiona­lly challengin­g times.

Under the umbrella of the National Developmen­t Fund, and in line with national efforts, SDB increased its social lending from $533 million to over $1 billion, and increased business lending from $1 billion to around $2 billion, shielding our beneficiar­ies from the financial burdens imposed by COVID-19. Additional­ly, a six-month loan deferment scheme was availed, benefittin­g more than 12,000 small enterprise­s to maintain employment rates and overall cash position.

SDB also introduced a range of products to tend to different financing needs, and create sector-specific solutions (e.g., healthcare, technology, retail, etc) to counter COVID-19 effects.

Moving forward, we will closely monitor socioecono­mic developmen­ts to ensure sufficient protection for our citizens and MSMEs during the pandemic.

How do you see SDB’s role in fostering the Fintech sector?

We believe Fintech is quite instrument­al in enhancing financial inclusion. In 2020, SDB sought to create alternativ­e financing solutions to increase the reach and affordabil­ity of funding, catering to the needs and aspiration­s of MSMEs.

This culminated in the launch of our first Fintech product with a P2P-lending platform, providing accessible loans to MSMEs.

Continuing our mission for greater financial inclusion, SDB has also introduced the largest, fully digitized freelance-financing product in the kingdom, “Nafath,” which facilitate­d $1 billion to 70,000 beneficiar­ies during its first year.

What products and services have you created for home-based businesses (HBBs)?

We are committed to enabling a robust financing ecosystem to commercial­ize HBBs and integrate them into the formal economy. Through an Apex funding model, SDB empowers NGOs, allocating financial portfolios to transform them into microfinan­ce institutio­ns. Additional­ly, we also offer a wide range of non-financial services such as capability developmen­t programs and sales outlets.

To date, over 140 NGOs in KSA have benefited from such services and portfolios, and the model has served 95,000 beneficiar­ies with total lending of around $300 million.

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