Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA

Abstract

The current study dealt with the obstacles and problems facing SMEs in the Kingdom of Saudi Arabia. The study followed the descriptive analytical approach and found that there are multiple problems facing these institutions, the most important of which are the lack of funding, availability and capacity of employees, weak demand, government regulations and regulations in addition to some obstacles represented in fees. Labor and workers system recruitment, Competition, employment of Saudis, issuance or renewal of licenses, bureaucracy, and government measures. One of the most important findings of this study is the possibility of developing this sector in the presence of the General Authority for Small and Medium Enterprises, which relied on the division of institutions into three types (micro, small and medium) according to labor standards and revenue size. Through these results, the study recommends that the Saudi Arabian Monetary Agency (the Central Bank of Saudi Arabia) should have an encouraging policy for financing SMEs with a unified definition and a specific percentage of financing ceilings to be financed, with a legal and legislative basis and a mechanism for the development of SMEs. And to consider the establishment of banks specialized in the financing of these institutions to play their role in accordance with the Kingdom's vision 2030.