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14-05-23

Islamic Development Bank Signs MOU Worth USD26.2m to Provide Finance for SMEs

(MENAFN) The Islamic Development Bank (IDB) has signed a memorandum of understanding worth USD26.2 million to provide finance for small and medium enterprises (SMEs), according to Saad bin Abdulaziz Al-Khalb, CEO of Saudi Exim Bank. Speaking at the IDB's annual meeting, Al-Khalb emphasized the importance of SMEs in the global economy, noting that in some economies they contribute up to 90 percent of economic activity. In Saudi Arabia, the contribution of SMEs to the GDP was 20 percent at the beginning of the Vision 2030 baseline, but the goal is to increase this to 35 percent by 2030.

Despite the significant role that SMEs play in the economy, Al-Khalb noted that they are often underserved in terms of trade financing. He explained that 57 percent of SME trade financing requests are declined annually by commercial banks. This is where Saudi Exim Bank and other development banks come in, providing a bridge to fill the financing gap and minimize export risk for SMEs.

Al-Khalb emphasized the need for SMEs to diversify their operations for the export market, which will help them to expand their customer base and increase their sustainability. By reaching an international and regional market, SMEs will have a better opportunity to compete globally.

The role of Saudi Exim Bank is to enable Saudi non-oil exports to reach global markets by providing financial solutions for SMEs to export. This includes bridging financing gaps and minimizing export risk through various forms of funding. By supporting SMEs in their export efforts, Saudi Exim Bank and other development banks are helping to drive economic growth and diversification in Saudi Arabia and beyond.

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