Kafalah Programme for SME | Business Banking

Kafalah program aims to provide a variety of SMEs oriented services and funding solutions in cooperation with the Saudi Industrial Development Fund (SIDF). The Bank provides financing to eligible clients up to SAR 15 Mill.

The following are the main objectives of Kalafah program:

Contribute to the enhancement of the level of competition between the small and medium enterprises locally, in a way that is reflected positively on the Saudi economy in many aspects, primarily through increasing job opportunities, improving training and employment as well as replacement of imported goods by locally produced goods.

Definition of Small and Medium Enterprises:

Fields and Activities

Tourist accommodation projects.
Electronic applications related to tourism and national heritage.
Popular restaurants and cafés in tourist sites.
Travel and tourism agencies, tour operators and organizers of tourism trips.
Rehabilitation and development of highways lodgings.
Heritage and archaeological projects.
Education, training, tourism and handicraft projects.
Leisure, sports and marine tourism projects.
Show rooms and conference halls.
Export.
Arts and entertainment.
Electricity, gas, air conditioning supply and clean energy.
Communication and information.
Professional, scientific and technical sector.
Health and social services.
Education.
Transport and storage.
Manufacturing and military industries.

Required documents for kafalah finance solution

A copy of valid CR.
A copy of the ID or IQAMA of the owners of the individual activity and copy of the Article of association (AoA) for companies.
Customer approval form for the Kafalah application.
Disclosure Form (from the relationship manager)
Valid GOSI certificate.
VAT certificate.
Valid Zakat and Income Tax Authority certificate.
The bank's application form for issuing the Kafalah
National Address
Copy of the valid lease contract or title deed.
Copy of the valid license
Valid Saudisation certificate.

Types of Kafalah Products:

1- Regular individual kafalah

Definition: a regular guarantee product whereas each application is evaluated independently to decide whether or not to Kafalah finance based on evaluation results through the specialists of the Kafalah program.
- SAR 2.5M as maximum amount for each entity of small and micro sized enterprises.
- SAR 15M as maximum amount for medium sized enterprises.
- SAR 8M as maximum amount for group of entities of small and micro sized enterprises.
Target enterprise size: small, medium and micro enterprises as defined by the General Authority of SMEs.

2- Individual kafalah for tourism sectors

Definition: a product designed to provide loan guarantee for entities that serve the tourism sector where it is subject to different coverage limits and ratios than other sectors. The individual guarantee method applies to this product so that each application is evaluated independently to decide whether or not to guarantee based on evaluation results.
Maximum amount of guarantee: The program provides Kafalah for this product up to a maximum of SAR 15M per entity.
Target enterprise size: small, medium and micro enterprises as defined by the General Authority of SMEs.

3- Individual kafalah for emerging enterprises

Definition: a product designed to provide loan guarantee for emerging enterprises that are less than 3 years old, which requires easy limits and conditions that take into account their situation. The individual guarantee method applies to this product so that each application will be evaluated independently to decide whether or not to guarantee based on the results of the evaluation through the specialists in the program.
- SAR 1M as maximum for the first year of the enterprise inception.
- SAR 2M as maximum for the second year of the enterprise inception.
- SAR 2.5M as maximum for the third year of the enterprise inception.
Target enterprise size: small, medium and micro enterprises as defined by the General Authority of SMEs.

4- Individual kafalah for working capital finance

Definition: a product designed to stimulate financing for working capital.
Maximum amount of guarantee: the program provides Kafalah for this sector with a maximum amount of SAR 15M.
Target enterprise size: small, medium and micro enterprises as defined by the General Authority of SMEs.

5- Micro Small and Medium enterprises (MSME) Financing programs

Category	POS Cash Flow Finance	Dental Clinics Finance	ARAMCO Contractors & Suppliers
Minimum Finance	SAR 100 k (SAR 50 k for Micro)	SAR 500 k	SAR 300 k
Maximum Finance	SAR 2.5 m (SAR 100 k for Micro)	Up to SAR 2.5 m or Kafalah max	Up to SAR 5 m or Kafalah max
Facility Type	Short Term Facility	Short, medium & long term	Short Term Facility
Finance Pricing*	SIBOR + 3% to 4%	SIBOR + 4% to 6%	SIBOR + 3% to 4%
MGT Fees	Minimum 2%	Minimum 2%	Minimum 2%
Years in Operation	12 months	Startup	24 months
Finance Tenor	Max: 12 months	Max 7 years with 1 year grace period	Max 12 months
Finance Product	Loans & Overdraft	Loans / LGs & LCs	Loans / LGs & LCs

*The charged rate will be SIBOR 3 months.

The above mentioned programs will be partially secured by Kafalah Guarantees and the pricing terms (fees & cash margin) will be changed in case of applying the criteria of the “Secured Lending Program” to be with:

- Nil cash margin.
- Nil management fees.
- Maximum profit rate of 4%.

Other eligibility conditions:

Extended finance must be Islamic products only.

Customer must have satisfactory credit record through SIMAH.

For more details, please contact the toll free number (8001245666).

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