As the Kingdom moves closer to its goal of expanding local firms, small and medium-sized businesses (SMEs) in Saudi Arabia are seeing a remarkable increase in entrepreneurial activity, with the total number of SMEs registered surpassing 1.2 million at the end of the first quarter.
According to the SME General Authority’s most recent report, or Monsha’at, more than 88,000 new businesses were founded throughout the Kingdom in the first quarter of 2023, representing a startling 179 percent growth from 2016 and a growth of 4.8% over the fourth quarter of 2022.
The rise was facilitated by an established entrepreneurial culture, advantageous macroeconomic circumstances, business-friendly regulations, and prospective investments.
The Kingdom has undertaken a number of bold initiatives to diversify its economy, reduce its dependency on oil, and assist in achieving Vision 2030’s goals of encouraging entrepreneurs and SMEs via public-private sector cooperation. The chairman of the Al-Madinah Al-Munawarah Chamber, Munir Mohammad Nasser bin Saad, is quoted in a report by SME Monitor.
He lauded Monsha’at for its part in this, saying that it “enables the wider entrepreneurship ecosystem through its many innovative services designed to help SMEs overcome challenges and build the businesses of tomorrow.”
The research states that while Saudi Arabia has a large SME ecosystem, the capital city of Riyadh continues to dominate the sector because of its supportive environment for dynamic expansion in a number of significant areas.
Riyadh “played a significant role” in the first quarter report since it had the greatest proportion of SMEs (41.4%), followed by Makkah and the Eastern province (18.9% and 11.1%).
Additionally, the Kingdom’s developing new SMEs were successful in obtaining $359 million in venture capital investment in the first quarter of 2023. Due to its unprecedented expansion, the SME sector in Saudi Arabia employed 6.5 million individuals at the end of the first quarter.
The SME Bank, which was essential in enhancing SME productivity and increasing their contribution to the GDP to 35% by 2030, was also established with help from Monsha’at in the interim.
The success of the Biban 2023 Forum, which was held in Riyadh in March and drew an estimated 145,000 people from all over the world, was especially notable since it led to approximately $13.8 billion in agreements and announcements for SMEs in the Kingdom.
In accordance with the study, Monsha’at has also just been awarded three international ISO certifications for putting into practise the finest procedures and norms currently in use to build a competitive and long-lasting ecosystem that promotes development across a range of businesses.
