RIYADH: Saudi Arabia’s Abha city has secured a new investment partnership to boost tourism by developing culturally rich dining and retail experiences. 

The Public Investment Fund’s firm Aseer Investment Co. has signed the deal with Nimr Real Estate and the National Co. for Tourism, or Syahya, to propel the project, the Saudi Press Agency reported. 

This aligns with the objectives of developing Abha, which will offer a range of benefits, including retail stores that reflect the cultural heritage of the Asir region. 

The partnership also seeks to be a model for multiple collaborations with private sector investors and create more regional job opportunities. 

Investments in the region are expected to create between 14,000 and 18,000 job prospects and contribute to up to 6 percent of the non-oil gross domestic product within 10 years, as outlined by the CEO of AIC, Osama Al-Othman, in February. 

Under the National Tourism Strategy, Saudi Arabia aims to attract 150 million visitors by 2030 and increase the sector’s contribution to the nation’s GDP from 6 percent to 10 percent.

The latest agreement seeks to empower the local community and develop and diversify the regional economy in line with PIF’s strategy. 

Speaking during a press conference on the Kingdom’s tourism plans that was held in July in Asir, Minister of Tourism Ahmed Al-Khateeb said the region enjoys moderate weather during the summer season and low temperatures compared to most cities in the world.

Visitors can enjoy various attractions, historic villages, local produce farms, delicious cuisine, and renowned locations set to provide rich cultural experiences, the minister said at the time.

Al-Khateeb said there is a significant demand and focus on the hospitality sector in the region and there are now 10 projects funded by the Tourism Development Fund, with an investment size of approximately SR1 billion ($266 million).

In February, during PIF’s second Private Sector Forum, Prince Turki bin Talal, chairman of AIC, unveiled the company’s ambitious plans as it embarked on its operational journey to make the area the number one tourist destination in the Kingdom.

Earlier this month, the Saudi Ministry of Tourism said the country achieved an 8.2 percent growth in spending by foreign visitors during the first half of 2024, compared to the same period in 2023. 

Total expenditures amounted to about SR92.6 billion, while the Kingdom posted a travel account surplus of around SR41.6 billion, the Saudi Press Agency reported at the time. 

The increase in spending by visitors to Saudi Arabia is part of significant developments in the tourism sector.

The Kingdom also topped the list of G20 countries in terms of growth in the number of international visitors and an increase in global tourism revenues during the first seven months of the year, compared to the same period in 2019, according to the UN World Tourism Organization.

This confirmed the effectiveness of the efforts made by the tourism system to achieve global leadership for the sector by applying best practices in travel and hospitality development, improving services and products, and continuous cooperation with all government entities. 

RIYADH: Credit facilities extended to micro, small, and medium enterprises in Saudi Arabia grew by 17.04 percent year on year in the second quarter of 2024, totaling SR307.4 billion ($82 billion), according to recent data. 

The Saudi Central Bank, known as SAMA, reported that 94 percent of these were provided by Saudi banks, while finance companies accounted for the remaining 6 percent. 

The facilities accounted for 8.8 percent of banks’ total lending portfolio and 19.5 percent of finance companies’ credit portfolios. The government is urging financial institutions to allocate 20 percent of their loan portfolios to this sector, demonstrating strong and ongoing support for these enterprises. 

Recent reforms in Saudi Arabia have simplified investment and startup processes, increasing this sector’s share of gross domestic product from 21 percent in 2013, with a Vision 2030 goal of reaching 35 percent.

In the second quarter, medium-sized enterprises received the largest share of credit facilities, totaling 54 percent or SR167.31 billion.

Micro enterprises experienced substantial growth, achieving a 45.53 percent increase in credit to SR33.7 billion, despite holding a smaller overall share.  

Credit to small enterprises, making up 35 percent of MSME financing, rose by 26.84 percent to SR106.39 billion during the same period. 

Micro enterprises are defined as those generating revenues up to SR3 million with a workforce of no more than five employees. 

Small enterprises have earnings ranging from SR3 million to SR40 million and can employ up to 49 workers, while medium enterprises generate between SR40 million and SR200 million in revenue and employ 50 to 249 individuals. 

Lending to the MSME sector in Saudi Arabia is experiencing strong growth, driven by the Kingdom’s economic diversification efforts under Vision 2030. 

As the country shifts away from oil dependency, demand is rising for private businesses to expand in key sectors such as entertainment, hospitality, sports, and retail — industries supported by a young, aspirational consumer base. 

Government initiatives like the Kafalah program play a crucial role in empowering MSMEs, particularly in the non-oil sector, by providing financial support and fostering sustainable economic development. 

Monsha’at key figures 

Monsha’at, a key enabler of Saudi Arabia’s Vision 2030, plays a vital role in the SME ecosystem by enhancing access to finance, promoting entrepreneurship, and providing critical support for business development. 

The authority facilitates funding for this sector through partnerships with financial institutions and initiatives like the Kafalah Program, which increases lending. It prioritizes upskilling SMEs through training programs and advocates for regulatory reforms to improve the business environment. 

According to its second-quarter report, Saudi Arabia saw a significant surge in commercial registrations, which grew by 78 percent year on year to 121,521, with 45 percent attributed to female-owned businesses. 

This rise underscores the private sector’s crucial role in driving the Kingdom’s economy and signals a boost in entrepreneurial activity and the creation of new businesses, many of which fall under the MSME category. 

The report also indicated a 4.3 percent increase in new registrations compared to the first quarter of 2024, demonstrating sustained growth across various sectors of the economy. 

In terms of regional distribution, Riyadh accounted for 32 percent or 482,690 active registrations, followed by Makkah with 23 percent or 342,840, the Eastern Province with 235,606, and other regions totaling 457,520. 

The report emphasized the vital role of financial technology in enhancing the growth and sustainability of MSMEs in Saudi Arabia. 

Established by SAMA and the Capital Market Authority, initiatives to foster a dynamic fintech ecosystem have led to significant advancements in the sector, exemplified by the Kingdom’s first fintech initial public offering for Rasan in May, which attracted considerable investor interest. 

By the end of 2023, the Kingdom was home to 216 active fintech companies employing over 6,500 skilled professionals. This growth reflects a robust investment landscape, with more than $1.84 billion in venture capital flowing into the sector. 

According to the report, the Fintech Lab has emerged as a key driver in this space, promoting growth and innovation by offering a supportive regulatory framework for entrepreneurs and startups to develop and test new products and services. 

This initiative has led to the emergence of innovative business models and the expansion of fintech startups. Furthermore, the Lab provides investment solutions for various investors and financing options for SMEs.

Authorized fintech companies have made significant contributions to job creation across multiple sectors. 

Looking ahead to 2024, initiatives such as the Open Banking Lab will create a collaborative environment for banks and startups to innovate, while the Financial Academy aims to enhance training for entrepreneurs and SMEs. 

The Makken Program will continue to support startups by easing regulatory and technological compliance costs, ensuring that this sector remains a driving force in expanding Saudi Arabia’s MSME landscape.