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Volume 1 Issue 2 Paper 2

Factors Related to the Financial Assistance of SMEs Through Kafala Programmes in Saudi Arabia

Saad Abdullah Altokhais


Based on a literature review yielding 11 useable papers, importance of SMEs to Saudi economy, problems of banks in lending to SMEs and problems of SMEs to access finance and the government solutions to these problems, primarily by implementation of kafala programme, were discussed. The effectiveness of kafala programmes in terms of actual achievement of access to finance and increased capabilities of SMEs were discussed based on the sourced reports. There is definite lack of objective studies on effectiveness of kafala programmes on financial performance of SMEs which have received the assistance. Research on these aspects will alone indicate whether the programme was truly effective, rather than just providing assistance.

It was concluded that the extent of access to finance and developing business capabilities of SMEs have significantly improved due to the implementation of kafala programme for the purposes. Further progress towards the achievement of the full potential will come through the implementation of Vision 2030.

Keywords: Kafala, SME, Saudi Arabia, Saudi Vision 2030

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