RIYADH: As part of its initiative to encourage financial institutions to invest in a greater number of small and medium enterprises (SMEs), the Kafalah program has signed an agreement with Saudi Finance Company. In its efforts to help achieve the Vision 2030 objective for SMEs to contribute 35 percent of the nation’s gross domestic product, Kafalah, the Saudi SMEs loan guarantee program, has so far signed deals with five major financing institutions, in addition to all Saudi banks and Emirates Bank. The program — the name of which comes from an Arabic word that means a guarantee or formal assurance that certain conditions will be fulfilled relating to a product, service or transaction — offers help to entrepreneurs to launch or grow their businesses. First they submit a financing request to one of the institutions that partners with Kafalah. If the lender needs guarantees to cover the risks associated with lending to new or developing businesses, it can request such a guarantees from the program. If the program approves the request, it selects one of four specially designed products to meet the needs of the institution and the entrepreneur. One of its products is designed for start-ups, offering extended support to build a strategic relationship with the General Authority for Small and Medium Enterprises and help meet their funding needs during  early growth. The Kafalah program is also giving special attention to helping women in business; by the end of 2017, businesswomen accounted for 5 percent of the work of the program. To help achieve Vision 2030’s objective to empower businesswomen and encourage their increased participation in SMEs, the program offers preferential benefits to enterprises that are at least 50 percent owned by women. A recent Kafalah report revealed that between the launch of the program in 2006 and the end of 2018 24,268 guarantees were issued for 6,291 establishments, worth almost SR 13.5 billion ($3.6 billion) and covering total financing worth SR 25.6 billion. The program aims to support all types of businesses in diverse sectors such as tourism, entertainment, manufacturing, services, trading and agriculture. The construction sector is the largest single beneficiary, with 5,300 requests since 2006, followed by trading. The report also revealed that in terms of geography, the highest number of requests came from businesses in Riyadh, followed by the Eastern Region. In 2018, Kafalah achieved a growth rate of 64 percent in the value of guarantees and 47 percent in the total amount of financing, compared with 2017.