Saudi Arabia’s Small and Medium Enterprises General Authority, Monsha’at, has signed a cooperation agreement with STC Bank. This is to expand SMEs’ access to digital financing products, with a financing portfolio valued at up to USD 1.33 billion (SAR5B).

The agreement will provide Sharia-compliant financing across working capital, equipment purchases, receivables, trade finance, and other SME needs, with facilities extending up to 10 years.

Why You Should Care

The agreement could broaden the financing options available to Saudi SMEs across different stages of their operations. Rather than focusing on a single type of facility, the partnership covers short-, medium-, and long-term financing for both cash and non-cash needs.

For SMEs, that includes funding for day-to-day operations, asset purchases, receivables, contracts, and trade activity.

The Details

Signed on the sidelines of the Money20/20 conference in Riyadh, the agreement intends to support entrepreneurship and facilitate access to Sharia-compliant financial products.

The financing program will offer facilities with terms of up to 10 years. Covered uses include working capital and operational expenses, purchases of assets and equipment, financing against point-of-sale receivables, and funding linked to contracts and projects.

The scope also extends to e-commerce businesses and includes invoice and accounts receivable financing. SMEs will additionally have access to business credit cards, supply chain financing, and trade finance services such as guarantees and letters of credit.

The agreement brings together Monsha’at’s role in supporting Saudi Arabia’s SME ecosystem with STC Bank’s digital banking offering.

The Ripple

The range of facilities could be relevant across several parts of the SME financing cycle. Working capital products address immediate operating requirements, while equipment and asset financing can support investment. Receivables and invoice financing can provide another route for businesses waiting on customer payments.

The inclusion of guarantees, letters of credit, and supply chain financing also extends the agreement into trade and commercial transactions, alongside more conventional business lending.

What to Watch

The agreement expands the financing options available to Saudi SMEs across a range of business needs. The rollout of the USD 1.33 billion (SAR 5B) portfolio could provide more flexible access to capital, from working capital and equipment purchases to receivables and trade finance. Its implementation will show how these products translate into greater financing access for SMEs.