Saudi SMEs extend lifeline with borrowing to recover from the pandemic

Borrowing by SMEs increased in the first quarter of 2021, as they invested to emerge positively from the pandemic, and partly as they incurred debt due to the Covid-19 lockdown.

According to the most recent figures by the Saudi Central Bank, the total amount of credit awarded to SMEs between the first quarter of 2020 and the first quarter of the current year increased by 39.74 percent.

The data showed that in the first quarter of 2021 the total amount of borrowing by SMEs was SR188.42 billion ($50 billion), up from SR134.84 billion in Q1 2020 and SR113.17 billion in Q1 of 2019.

The SAMA data showed that the medium-sized enterprises were the top beneficiaries of the government subsidies and their revenues ranged between SR40 million and SR200 million. Medium enterprises are classed as those with 50-249 employees.

Mohammed Ramady, a London-based independent economist, told Arab News it is not surprising to see a surge in credit provided by both banks and finance companies due to “economic revival in this period, and due to the SMEs sector receiving increased government support through Monshaat (the General Authority for SMEs).”



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