According to official data, despite a decrease in venture capital funding across the Middle East and North Africa (MENA) region in the second quarter (Q2) of 2023, Saudi Arabia continued to lead the way, raising a total of $446 million in the first half (H1) of the year.
The latest report released by the SME General Authority (Monsha’at) revealed Saudi Arabia received 42 percent of all funding directed towards SMEs in the MENA region during the first half of 2023.
Findings revealed that the small and medium enterprise (SME) sector in Saudi Arabia experienced a 2.6 percent increase in the second quarter (Q2) of 2023. The number of SMEs rose to 1.23 million, up from 1.2 million in Q1.
Riyadh emerged as the focal point for 42.3 percent of the SMEs by the end of Q2, as highlighted in the report.
The Makkah region accounted for 18.6 percent of the SMEs, while the Eastern Province followed closely with 10.9 percent. The Aseer Province hosted 5.3 percent of the SMEs, and the remaining cities collectively represented 22.9 percent of the total.
The report presented a detailed breakdown of Saudi Arabia’s SME ecosystem, highlighting the existence of 17,888 medium-sized companies, 152,825 small-sized establishments, and 1.06 million micro-sized firms.
By the end of Q2, the Riyadh province accommodated a total of 518,516 SMEs, while the Eastern Province hosted 228,337 SMEs. The Aseer region made a contribution of 64,440 SMEs.
Contribution to GDP
The promotion of the SME sector is in line with the goals of Saudi Arabia’s Vision 2030. The vision sets a target for SMEs to contribute 35 percent to the gross domestic product (GDP) by 2030, playing a significant role in reducing the unemployment rate from 11.6 percent to 7 percent, and increasing women’s workforce participation from 22 percent to 30 percent.
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