RIYADH: Financing provided to small and medium enterprises in Saudi Arabia surged by 20.4 percent year on year to $73.5 billion in the fourth quarter of 2023, official data showed. In its latest quarterly report, the Kingdom’s Small and Medium Enterprises General Authority said that credit facilities provided to micro and SMEs amounted to $6.7 billion and $24.6 billion, respectively, in the last three months of 2023. On the other hand, medium enterprises in the Kingdom secured finance worth $42.2 billion in the last quarter of the previous year. The authority, also known as Monsha’at revealed that banks in Saudi Arabia provided credit facilities worth $68.9 billion in the fourth quarter of 2023, representing a rise of 21.1 percent compared to the same period of the previous year. On the other hand, finance companies in the Kingdom provided loans amounting to $4.6 billion in the last three months of 2023, marking a year-on-year rise of 9.3 percent. Developing the SME sector is crucial for Saudi Arabia as the Kingdom is currently on a path of economic diversification, as it steadily reduces its dependency on oil. The report revealed that 9,644 SMEs were benefitted from Monsha’at support centers in the first quarter of this year. Moreover, three SMEs had their initial public offering on the parallel market Nomu through the Tomoh program in the first quarter of 2024. Monsha’at also revealed that Saudi Arabia led venture capital funding in the Middle East and North Africa region with $240 million deployed across 35 deals in the first quarter of this year. “With $240 million deployed across 35 deals to Saudi-based companies, the Kingdom accounted for a remarkable 65 percent of all VC funding in the region,” said the authority. The report attributed 54 percent of this VC funding to the $130 million pre-initial public offering secured by Salla in March. “While the $240 million invested in the first quarter maintains the Kingdom’s dominance, it did reflect a considerable quarterly drop of 70 percent from the fourth quarter of 2023, along with a 42 percent year-on-year drop. This downturn mirrors the broader trend across the MENA landscape,” said Philip Bahoshy, founder and CEO of venture capital data platform MAGNiTT. He added: “Digging deeper, it becomes evident that while the overall funding has diminished, the Kingdom’s entrepreneurial ecosystem continues to attract investors.”