A major target of the Financial Sector Development Programme (FSDP) has been improving financial inclusion in Saudi Arabia, especially for women. Since the World Bank began recording data in 2011, men have consistently been above the global average when it comes to bank account ownership, with 73% of Saudi men having accounts in 2011 compared to the global average of 55%. By 2024 this gap had narrowed, with 82% of Saudi men having bank accounts compared to 80% globally. The most impressive growth has been among women: in 2011 only 15.2% had their own bank account, compared to 46.6% of women globally; by 2024 this gap almost closed, with 73.5% of Saudi women having a bank account, slightly below the 76.6% global average. Since the launch of Vision 2030 and the FSDP, women’s participation in the labour force has almost doubled, from 11.5% in 2017 to 19.7% in 2024.
Small Businesses
A key reason for this is investment in boosting the Kingdom’s small and medium-sized enterprises (SME). Despite making up less than a 20% of the active labour force, women-owned SMEs make up more than 40% of the total. While the FSDP’s stated aims focus on growing SME financing and economic diversification, one result is women female labour participation and boosting their financial independence.
This growth has been supported by two entities. The Small and Medium Enterprise Bank (SME Bank), a sub-fund of the National Development Fund, was established in December 2020 and functions as a guarantor for SME lending at commercial banks. This has the dual impact of reducing risk for banks’ lending to SMEs, while also diversifying banks away from their traditional large corporate clients. A second initiative is the SME Financing Guarantee Programme (Kafalah), administered by the General Authority for SMEs ( Monsha’at). The programme works similarly to that of the SME Bank and gives banks a guarantee when lending to SMEs. In 2021 the Kafalah programme guaranteed SR13.7bn ($3.7bn), rising to SR14.2bn ($3.8bn) in 2022.
The trade sector is the largest recipient, both by the total number of organisations and amount, with 3476 out of 7828 enterprises receiving SR5.1bn ($1.4bn) in 2023. Building and construction, with SR2.6bn ($693.2m), and the industry sector, with SR2.3bn ($613.2m), account for the majority of the guaranteed funds. Beyond the Kafalah programme, Monsha’at runs multiple initiatives, including supporting young entrepreneurs, and setting up programmes for universities and in industries where Saudi Arabia has an interest in developing domestic know-how – with pharmaceutical-focused initiatives featuring prominently.
Progress
Saudi Arabia targets SMEs to contribute 35% to GDP by 2030, from a baseline of around 20%. According to the Saudi Central Bank (SAMA), bank credit extended to micro- and SMEs grew by 21.1% in 2023, and the central bank said that it expected comparable growth in 2024. In SAMA’s October 2025 statistical bulletin, it was clear that SME lending has grown substantially. In 2020 finance companies extended SR11.9bn ($3.2bn) in credit to micro- and SMEs. By the second quarter of 2025 this had growth to SR18.6bn ($5bn), with SMEs making up the majority of that growth. Especially the medium-sized enterprise segment, defined as those with 50 to 249 employees and less than SR200m ($53.3m) in revenue, the total amount almost doubled from SR4.2bn ($1.1bn) in 2020 to SR7.4bn ($2bn) in the second quarter of 2025.
Taking this growth in funding and women’s labour participation rates as rough proxies for SME sector growth, it is likely that Saudi Arabia will come close to reaching its 2030 SME target. While fiscal space might tighten due to lower oil prices and higher debt servicing costs, the funds used in SME-promoting initiatives are relatively small compared to the cost of Vision 2030. The raft of positive second-order consequences deriving from SME financing means that the return on investment is both financially and societally appealing, and cutting this funding is therefore unlikely going forwards.
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