With the rise of SMEs in the first quarter of 2023 — surpassed 1.2 million this year — entrepreneurial activity in Saudi Arabia is picking up. SMEs play a significant role in lowering the unemployment rate from 11.6 % to 7% in the kingdom and contributing 35% of the GDP.
The General Authority for Small and Medium Enterprises (Monsha’at) report stated that the number of SMEs in the kingdom increased by 4.8% in Q1 of 2023 as compared to Q4 last year. It added around 88,858 new enterprises, with 41% based in Riyadh. Reaching $359 million, financing for SMEs in Saudi was at its highest in the first quarter of this year.
The new enterprises aid the growth of several sectors in the kingdom by providing new goods and services that are otherwise unheard of or a rarity. Industries like tourism, e-commerce, retail, food and beverage, and fintech have all benefited from the new SMEs.
Mohammed Al-Belwe, Vice Governor for Communications at Monsha’at, hopes that the new generation will help the kingdom’s economy by boosting growth in the private sector as it moves away from fossil fuels to renewable energy.
After Riyadh, Makkah stood second in supporting new SMEs with around 18.1%, while 11.1% were based in the Eastern Province.
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