Saudi Arabia’s government and export-import bank are seeking to grow non-oil exports and increase SME access to trade finance facilities, signing an agreement with the Islamic Trade Finance Corporation (ITFC). 

The ITFC joins the Saudi Export and Import Bank (Saudi Exim Bank) and the General Authority for Small and Medium Enterprises, known as Monshaat, as signatories to the tripartite memorandum of understanding. 

The agreement creates a cooperation framework for supporting SMEs in Saudi Arabia, with a focus on growing and diversifying exports in line with Crown Prince Mohammed bin Salman’s Vision 2030 programme of reforms. 

“The SME programme will be designed to increase non-oil exports through trade finance facilities and capacity-building initiatives for enterprises participating in the programme,” the three organisations say in a joint announcement issued this week. 

“In addition, the programme will also look to increase the readiness of financial institutions to fund SMEs in the kingdom.” 

The Middle Eastern state has been under increasing pressure to reduce reliance on oil exports by diversifying its export portfolio, particularly amid growing international pressure to transition towards renewable sources of energy. 

Launched in 2020, Saudi Exim Bank has been tasked with stimulating SMEs’ export activity and growing their contribution to the country’s GDP. 

The ITFC, meanwhile, has upped its support for countries looking to reboot their economies after the disruption caused by the Covid-19 pandemic.  

Saudi Exim Bank’s chief executive, Saad Abdulaziz Al-Khalb, says the memorandum of understanding intends to help coordinate the provision of trade finance in support of those aims. 

“The diversification of the alternative economy through exporting more Saudi non-oil products is a strategic objective of Saudi Arabia’s Vision 2030,” he says. 

“By working closely with our partners to develop the SME programme, the bank will increase international finance and credit institutions’ support in diversifying financing products and innovate financial and credit solutions for SMEs.” 

Monshaat governor Saleh Al-Rasheed says the agreement focuses on creating a growth environment for entrepreneurs, including by providing support services for businesses and boosting technological innovation – as well as improving access to finance. 

Hani Salem Sonbol, chief executive of ITFC, adds: “As the kingdom looks to increase SME contribution to 35% of GDP by 2030, supporting SMEs in trade finance and trade development will be essential to meeting this goal.”