Saudi Arabia Finance Minister Mohammed Al-Jadeen recently said that there is a chance for businesses in labour-intensive industries in the Kingdom to receive virtually interest-free loans.
If your own an SME (micro, small or medium-sized enterprise) company then you may be able to feel an ease on expenses soon. The Saudi government wants to help relieve debt among smaller companies since the recent drop in oil prices. A report by BLOOVO.com, an online recruitment platform, recently said that SMEs need government support to overcome challenges and flourish, as they are a key component for economic growth in Saudi.
Traditionally, SMEs suffer a lack of credit lines, with many banks in the GCC unwilling to lend to smaller businesses. And with finance rejection rates running as high as 75% in Saudi, many businesses fail within the first few years.
In a bin to encourage private businesses to expand, Saudi officials are currently in talks to provide government support with loans and ease the impact of higher domestic energy prices.
Al-Jadeen said the new lending programme will hopefully stimulate the economy squeezed by low oil prices and government spending cuts.
The Kingdom has a 2030 Vision, spearheaded by His Highness Deputy Crown Prince Mohammed bin Salman, who has placed an emphasis on job creation – particularly for the 50% of under-25 nationals that make up the Kingdom’s population.
Crown Prince Mohammed bin Salman wants to also introduce VAT, higher visa fees and a charge on expatriates to reduce revenue-dependence on oil.
The proposal will likely be ready by the end of the second quarter.
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