Saudi Arabia disbursed $4.5bn in loans to help small businesses amid Covid-19

Industrial, mining, energy and logistic companies benefited from the funding initiative last year

Saudi Arabia is aiming to create a clear identity through its Saudi Made brand to market its produce nationally and globally. Bloomberg

The Saudi Industrial Development Fund provided $4.5 billion in loans to mostly small and medium-sized enterprises last year to support them amid the Covid-19 pandemic.

The loans were offered to companies in the industry, mining, energy and logistic sectors, according to a statement published on the SIDF's website on Thursday. SMEs accounted for 84 per cent of loans disbursed to 201 businesses.

Ibrahim Almojel, chief executive of SIDF, said the fund would continue its contributions this year as it endeavours “to attract investments and transform the kingdom into a leading industrial powerhouse and a global logistics hub”.

Saudi Arabia, the biggest Arab economy, has launched 142 stimulus initiatives with a total value of 214 billion Saudi riyals ($57bn) since the coronavirus outbreak. In June last year, the Saudi Central Bank injected 50bn riyals to boost liquidity in the banking system and the lending capacity of its financial institutions.

Riyadh’s Covid-19 support package included deferral of government fees and loan payments by the corporate sector, especially by SMEs.

The SIDF, created in the 1970s, provides medium and long-term loans to the private industrial sector. The fund began financing energy, logistics and mining projects in the kingdom in 2019.

The entity rolled out three financial aid packages worth more than $1.3bn immediately after the outbreak of Covid-19.

In June, it launched initiatives worth about $1bn to support more than 500 industrial businesses hurt by the pandemic. These included deferment and restructuring of loan instalments.

The SIDF introduced credit instruments worth $127m to finance 86 companies’ operating expenses, especially those affected by the pandemic-induced movement restrictions in the kingdom. It also provided an accelerated working capital loan worth $172m to finance the raw material requirements of companies in the medical sector, the statement said.

The industrial fund said it would “stimulate investments in priority economic sectors … and focus on human capital development in 2021”.