RIYADH: Saudi small and medium enterprises financing program Kafalah has taken a significant step toward encouraging local manufacturers by entering into a cooperation agreement with the Saudi Export-Import Bank. The collaboration between Kafalah and Saudi EXIM Bank aims to introduce an export sector financing guarantee product, fostering the growth of SMEs’ export endeavors, as reported by the Saudi Press Agency. The agreement outlines that Saudi EXIM Bank will broaden its financing outreach to a wider spectrum of SME exporters, leveraging a specialized credit track. This will offer enhanced benefits, including reduced fees and increased coverage volume compared to the standard track. This initiative aligns with the Kingdom’s drive to attain the objectives outlined in Vision 2030, where SMEs are anticipated to contribute 35 percent of the nation’s gross domestic product. Executive Director of the Saudi EXIM Bank, Saad Al-Khalab, and CEO of the Kafalah program, Hammam Hashim, signed the deal on Wednesday. In addition to the advantages given to SME’s in various sectors, the agreement also gives way to exchanging consultations between both entities to achieve common goals. Since the SME sector is one of the crucial engines of economic growth, the step contributes to the Kingdom’s development, noted Al-Khaleb. Saudi Arabia’s SMEs witnessed robust growth in entrepreneurial activity, with the total number of registered firms reaching 1.2 million at the end of the first quarter of 2023, according to a report published in July from SME General Authority, also known as Monsha’at. This includes more than 88,000 new businesses which were established throughout the Kingdom in the first quarter of 2023, up 4.8 percent on the fourth quarter of 2022, and a striking 179 percent growth from 2016, showed the report. The increase was driven by a combination of supportive business policies, advantageous macroeconomic circumstances, prospective investments, and an established entrepreneurial culture. “The Kingdom has undertaken a series of bold initiatives to develop its economy, reduce its dependency on oil, and contribute to achieving Vision 2030’s goal of building a diversified and sustainable ecosystem, developing SMEs, and supporting entrepreneurs through private and public sector cooperation,” Munir Mohammad Nasser bin Saad, chairman of Al-Madinah Al-Munawarah Chamber, said in the report in July.