JEDDAH, 19 Apr. – The International Islamic Trade Finance Corporation (ITFC) signed a memorandum of understanding on Tuesday with the Saudi Export-Import Bank (Saudi EXIM) and the Small and Medium Enterprises General Authority (Monshaat).
The three-way MoU serves as a measured agreement to launch the Small and Medium Enterprises Development Program in Saudi Arabia.
The MoU’s signing ceremony was attended by His Excellency Dr. Majid bin Abdullah Al Qasabi, the Chairman of Monshaat; His Excellency Bandar Alkhorayef, the Minister of Industry and Mineral Resources and Chairman of Saudi EXIM; and Dr. Mansur Muhtar, Vice President, Country Programs at the Islamic Development Bank (IsDB.)
The agreement was signed by His Excellency Eng. Saad bin Abdulaziz Alkhalb, the Chief Executive Officer of Saudi EXIM; Saleh bin Ibrahim Alrasheed, the Governor of Monshaat; and Eng. Hani Salem Sonbol, the Chief Executive Officer of the ITFC.
The MoU establishes a general framework for coordination and collaboration in regards to creating growth programs for domestic SMEs. By activating these programs, the tri-lateral agreement aims to help local SMES contribute to the Kingdom’s non-petroleum exports, with trade financing and capability building functions being offered to participating SMEs. The growth program additionally offers training and consultancy services, which will help local SMEs become more qualified to obtain financing. Local banks are also eligible to join the financing side of the program.
Alkhalb, Saudi EXIM’s CEO, said that the MoU comes as part of the bank’s efforts to bolster cooperation with public and private institutions, exchange expertise with local and international finance and credit houses, and diversify financing and credit products that attract more clients in general and SMEs in particular, given that SMEs consist of more than 51 percent of Saudi EXIM’s current clientele.
He also added that the program would enable Saudi banks to provide financing for non-petroleum Saudi exports, increasing the Kingdom’s global competitiveness and the economic impact of non-petroleum exports on the country’s gross domestic product.
The program would also increase economic diversity within the Kingdom, a key objective of Vision 2030.
Sonbol, ITFC’s Chief Executive Officer, said that the collaboration between the three parties would increase productivity amongst Saudi SMEs, strengthening their contribution to non-petroleum exports and connecting new markets with key national sectors.
He added that the collaboration is part of the ITFC’s role of helping regional trade become more efficient and inclusive, adding value to regional economies, creating jobs, improving people’s lives, and fostering sustainable development throughout the Muslim world.
Alrasheed, the Governor of Monshaat, pointed out that the MoU is key to building capabilities among SMEs, thanks to the growth initiatives, efficiency consultancy services, and bespoke programs for exporters fostered by the three-way collaboration.
Monshaat, he added, focuses on creating an attractive environment for entrepreneurs and owners of SMEs with supportive services, programs and initiatives that streamline business operations, foster innovation and facilitate access to financing, all of which are key factors in boosting the fiscal contribution of SMEs, in hopes of raising their net contribution to the GDP to 35 percent.
