RIYADH: The number of small and medium enterprises in Saudi Arabia registered a 15 percent growth to 752,600 in the first quarter of 2022 from 650,550 in the corresponding period last year, revealed the Small & Medium Enterprises General Authority, also known as Monsha’at, in its latest report. According to Monsha’at, SMEs are companies with less than 250 staff members and annual revenue below SR200 million ($53 million). The report also indicated that SMEs amounted to 62 percent of all employment in the private sector, with each enterprise on average hiring 12 people. “A change of mindset can partially explain this growth. Saudis today are increasingly willing to venture into entrepreneurship and start and scale their businesses,” Monsha’at Vice Governor of Entrepreneurship Saud Alsabhan told Arab News. “Our job, as an entity dedicated to SMEs, is to advise, guide and improve these businesses’ chances of success,” he added. The agency aims to grow SMEs’ contribution to the country’s gross domestic product from 20 percent to 35 percent by 2030. Sectoral snapshots In terms of sector, retail, construction and food and beverages were the most active, constituting 14, 13, and 10.2 percent of SMEs, respectively, in the first quarter of 2022. On the other hand, sectors with the most investments in 2021 were retail, enterprise software, and fintech, which raised over $390 million. Another reason fueling the rise of SMEs is the surge in capital investments that have flourished in the Kingdom over the past few years. Local and foreign investors have been eyeing governmental support to startups and SMEs as one in every 33 enterprises received funding. Monsha’at alone has provided over SR100 billion in value through financing programs and initiatives as of the first quarter of 2022. Saudi investors were the most active in 2022, in addition to witnessing a record-high increase of 52 percent in 2021 compared to the year before, reported research firm MAGNiTT. Improving tech know-how Founder and managing director at Saudi-based venture capital firm Nama Ventures, Mohammed Al-Zubi, told Arab News that the growth of SMEs in the Kingdom is partially attributed to the “unparalleled support” by the government. “The maturity of Saudi entrepreneurs themselves and the rise of their level of know-how and sophistication is the main aspect of the Kingdom’s growth,” Al-Zubi added. Monsha’at added that over 239,000 SMEs are located in Riyadh, accounting for 31.8 percent of all SMEs in the country and employing over 1.8 million people, making the capital one of the most dynamic cities in the Kingdom for small businesses. Emerging markets in the Middle East and North Africa region have all been performing well, with the importance of startups and SMEs being recognized by governments. Although the global market has been negatively affected, improvement in the Middle East and North Africa region is still persistent, with a 33 percent increase in SME funding in the first quarter of 2022 compared to the previous quarter, according to a report by MAGNiTT. The UAE and Egypt have also been focusing on SMEs and supporting startups through funding initiatives, with both countries raising over $450 million in venture capital funding in the first2022, according to MAGNiTT. The UAE has seen 75 percent quarter-on-quarter growth in 2022 in startup funding, with international investors amounting to 61 percent of all transactions.