Riyadh: Small and medium-sized businesses (SMEs) in Saudi Arabia are experiencing rapid growth in entrepreneurial activity, with the total number of SMEs registered reaching 1.2 million at the end of the first quarter as the Kingdom advances its objective to grow local businesses.
According to the most recent report from the SME General Authority, also known as Monsha'at, more than 88,000 new businesses were established throughout the Kingdom in the first quarter of 2023, registering 4.8 percent growth over the fourth quarter of 2022 and a startling 179 percent growth from 2016.
An established entrepreneurial culture, favourable macroeconomic conditions, supportive business policies, and potential investments all contributed to the growth.
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The Kingdom has taken a number of audacious actions to expand its economy, lessen its reliance on oil, and help achieve Vision 2030's objectives of developing SMEs and supporting entrepreneurs through collaboration between the public and private sectors. SME Monitor, a report, quotes Munir Mohammad Nasser bin Saad, the head of the Al-Madinah Al-Munawarah Chamber.
In order to "enable the wider entrepreneurship ecosystem through its many innovative services designed to help SMEs overcome challenges and build the businesses of tomorrow," he praised Monsha'at for its role in this.
The SME ecosystem in Saudi Arabia is widespread, but the capital city of Riyadh continues to dominate the sector due to its favourable environment for dynamic growth in a number of important sectors, according to the report.
According to the first quarter report, Riyadh "played a significant role" because it had the highest percentage of SMEs (41.4%), followed by Makkah and the Eastern province (18.9% and 11.1%).
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Additionally, in the first quarter of 2023, the Kingdom's emerging new SMEs were able to secure $359 million in venture capital funding. By the end of the first quarter, Saudi Arabia's SME sector employed 6.5 million people due to its unheard-of growth.
In the meantime, Monsha'at also assisted in the establishment of the SME Bank, which was crucial in boosting SME productivity and raising their contribution to the GDP to 35% by 2030.
The accomplishments of the Biban 2023 Forum, which took place in Riyadh in March and attracted an estimated 145,000 visitors from around the globe, were also noteworthy because they resulted in over $13.8 billion in agreements and announcements for SMEs in the Kingdom.
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According to the report, Monsha'at also recently received three international ISO certificates for implementing the best practises and standards available worldwide to create a competitive and sustainable ecosystem that fosters growth in a variety of industries.