SME Banking

The importance of SME sector is well recognized world over for its significant role in the global economic growth. The vibrant SME sector in KSA plays a pivotal role in generating employment, driving economic growth, increasing cross border trade & fostering the spirit of entrepreneurship.

Al Rajhi Bank has always taken the lead in developing innovative financial solutions tailor made for its customers. Realizing the importance of the SME segment and with a view to enhance the competitiveness of SMEs in the globalised scenario , SME Banking department at Al Rajhi Bank is structured to meet the financial requirements of small businesses operating in various sectors of the economy including trade, services and manufacturing.

Whether you are an entrepreneur staring the business or an established business looking to grow, Al Rajhi Bank provides access to a large number of products and services tailored to your specific business requirements. To understand the core financial issues of SMEs and to offer unmatchable solutions, a team of professional qualified relationship managers are present in key locations of the kingdom

• What is SME at Al Rajhi Bank?
  Entities with annual sales turnover upto SAR 30 million would be categorised as SME
• Why SME at Al Rajhi Bank?
  • Large Branch network
  • Dedicated Relationship Managers
  • Product & Service bouquet
  • E – Cash
  • E – Trade
  • Sharia complied products
• What products can you get for your business?

  As part of our ongoing commitment to provide SMEs with the right products, we have developed a number of Islamic products in accordance with both international standards and Sharia requirements

  Financing:

  • Bai Al Jel
  • Murabha
  • Musharaka
  • Akar
  • Eirad

  Trade Finance

  • Export/Import Document Collections
  • Import/Export LC
  • Letters of Guarantee
  • Musharaka / Murabaha LC

  Cash Management

  • Cash Collection
  • Payroll / Payroll cards
  • Al Mubasher E-Corporate
  • Dividend Distribution
  • Point of Sale
  • Direct Debits
  • Positive Pay Cheque
  • Alerts
  • Token Devices
• How to get in touch / apply?
  If you are interested or require more information about our SME products & services please contact our Call Centre at 800-122-8888, our Relationship Managers will be in touch with you soon to discuss your needs & requirements

Kafalah Program

Supported by the Ministry of Finance and the operating banks of KSA,the Program is tailored to guarantee the Bank a percentage of the finance credit given to Small and Medium Enterprises in order to allow them to get finance from the Bank after studying their economic feasibility. In other words, the Kafalah Program guarantees financing banks 80% of existing projects’ finance and future projects’ finance value.

• Definition of Small and Medium Enterprises (SMEs)
  Any profitable activity, whether small or medium, that is established under the applicable regulations of KSA, ith a yearly sales value that does not exceed SR 30,000,000.
• Program Message

  To contribute to the advancement of the Saudi national economy and decrease unemployment through the continuous development and upgrading of the Small and Medium Enterprise sector.

  Finance objective:

  Buying fixed assets and/or financing working capital.

  Minimum limit for Kafalah:

  SR 80,000.

  Maximum limit for Kafalah:

  The Program offers a guarantee of up to SR 1.6 million for new and existing enterprises.

  Minimum limit for finance:

  The minimum limit of a qualifying finance value is SR 100,000.

  Maximum limit of finance:

  The maximum limit of a qualifying finance value is SR 2 million.

  Kafalah period:

  The guarantee is issued in consistency with the finance term, which is up to 7 years (the guarantee term can be extended upon the Bank’s request).

  The finance process adopted in the Program:

  The Program offers guarantees for all types of financing and according to Al Rajhi Bank’s approved and Shariah compliant finance solutions.
  For more information, please contact us on our toll free 800 122 8888 or visit our nearest branch.
• The Domains Covered by The Program

  The Kafalah Program covers all the economic activities of the Kingdom, which are owned by Saudi investors, shared with foreign investors or even owned by foreign investors, such as:

  • Industry in all fields
  • Activities in the agricultural sector
  • Commercial activities
  • Education
  • Tourism and entertainment
  • Entrepreneurship
  • Transportation and telecom
  • Services activities
  • Medical establishments

  The domains not covered by the Program:

  • Activities that are not considered small or medium according to the definition mentioned above
  • Activities owned by or run by the government
  • Brokerage (banking brokerage or real estate or pyramid selling schemes)
  • Any activity violating Saudi regulations or laws
  • Commercial activities based exclusively on buying and reselling commodities
• Conditions Required in The Guaranteed Activity
  • It should have a legal entity
  • The project should be economically, financially, technically and managerially viable
  • The project should positively contribute to the advancement of the Saudi economy by employing and training Saudi nationals and/or substituting imports by locally produced goods and/or producing innovative and high quality goods and services
• Steps for Kafalah Program Issuance
  • Direct submission of the finance request and the following to the Bank:
    1- Documents of the activity and any other related documents requested by the Bank
    2- Kafalah finance application (available at the Bank)
  • Bank examination of the request and application form according to its applicable criteria
  • In case of approval, the Bank requests from the Program to issue the guarantee corresponding to the finance request, and attaches the applicant’s acceptance of the Kafalah Program form introduced by the Bank
  • Issuance of the required guarantee by the Kafalah Program after evaluating the request submitted by the Bank and confirming its conformity with the Program’s criteria and after studying the request and the personal guarantees of the owner’s activity, the Program requires additional necessary guarantees (for the Program’s interest) including mortgage of assets
• Documents Required for Kafalah Issuance
  • Copy of ID/Iqama
  • Copy of activity’s license
  • Copy of commercial register
  • Copy of the enterprise’s foundation contract (if the enterprise is a company)
  • Copy of the location’s rent or ownership contract enabling the practice of the activity
  • Economic feasibility study (for new projects)
  • Copy of audited financial results for three years (for existing projects)
  • Finance demand application
  • Copy of ownership documents (real estate, cars, etc.)
  • Any further documents the Bank requires
• Frequent Questions and Answers

  Q: What is the Kafalah Program of the Saudi Industrial Development Fund?
  A: Its main function is to offer guarantees to financial establishments in order to minimize risks of the Small and Medium Enterprise sector. The Program can guarantee up to 80% of the finance amount given to new and existing Small and Medium Enterprises.

  Q: What activities are qualified for finance under the Kafala Program that is specifically for the Saudi Industrial Development Fund?
  A: Any activity that has a total annual revenue of up to SR 30 million can get finance under this Program. The legal entity of the establishment is also necessary because if more than one company areunder one legal entity, the total revenue of all these companies will be taken into consideration.

  Q: Are there any activities not qualified to get finance under Kafalah?
  A: Exceptions include the following:
  • Activities owned or managed by the government
  • Activities exclusively based on purchasing and selling commodities without any added value
  • Brokerage activities - purchasing and selling, real estate, stock, etc.
  • Activities that do not comply with Saudi Arabian regulations

  Q: Does the Kafalah Program offer guarantees for new companies and new projects as well as existing ones?
  A: Yes, the Program offers guarantees for both types, according to its criteria.

  Q: What kind of credit facilities does this Program cover?
  A: It covers the long-term finance of fixed assets and short-term finance that is usually required for working capital.

  Q: Does the Program’s finance extend to non-concrete services?
  A: Yes, it covers services such as marketing, design, creative work or even inventions.

  Q: What is the maximum limit of the guarantee issued by the Kafalah Program of Small and Medium Enterprises?
  A: The maximum limit is SR 1.6 million on the condition the amount does not exceed 80% of the finance amount.

  Q: What is the maximum term for the guarantee issued by the Program?
  A: The guarantee can be issued for up to 7 years, on the condition that the Bank agrees to the credit as a whole.

  Q: How can I apply for the Kafalah Program financing?
  A: Provide Al Rajhi Bank, through its branches or phone banking, with all your contact details: name, address, fixed landline numbers, mobile numbers, etc. The Relationship Manager then handles all the instructions and guides you to complete the needed requirements.

  Q: Does the Saudi Industrial Development Fund agree on the credit facilities issued by the Program?
  A: First, Al Rajhi Bank will study and evaluate your request according to its applicable criteria. After approval, the Bank presents your request to the Fund in order to issue the Kafalah guarantee. The Fund is fully entitled to approve or reject the issuance of the Kafalah financing.