How Saudi Arabia is nurturing its small and medium entrepreneurs

RIYADH: Abeer Al-Hashim is a busy woman who runs a chain of popular ice cream outlets called Nine Soft Serve in Alkhobar. When she is not tending to her customers, she is charting expansion plans with one of the unlikeliest business mentors: Monsha’at, or the Small and Medium Enterprises General Authority in Saudi Arabia.

And she sure has had an eventful journey. Starting as a single mobile ice cream unit in 2018, Al-Hashim now operates six retail outlets — four in Riyadh and two in Alkhobar.

What makes her story truly inspiring is how Monsha’at turned around her business plans. The state-owned mentor provided her with guidance and resources to expand her operation locally and internationally, including putting her in touch with a franchising consultancy.

“The entire commercial process is simpler now. It’s so easy to communicate with the government online and, as a woman, you no longer need a man to speak on your behalf,” said Al-Hashim.

Fueling the fire

Monsha’at, on its part, is fueling the SMEs by providing entrepreneurial platforms such as businesses incubators, business accelerators, and co-working spaces. The authority also organizes government fee-refund, direct and indirect lending programs for SMEs, and fast-growing unicorns.

The state-run authority, in collaboration with the US-based Global Entrepreneurship Network, is organizing the Global Entrepreneurship Congress, with more than 180 countries taking part from March 27-30, 2022. The event will take place at King Abdulaziz International Conference Center and the Ritz-Carlton hotel.

“Our role is to provide quality programs, services, and initiatives that meet the basic needs of SMEs, which represent around 99.6 percent of all private sector establishments and more than 60 percent of all private sector employees in Saudi Arabia to increase their contribution to 35 percent of the gross domestic product by 2030,” said Saleh Ibrahim Al-Rasheed, governor of Monsha’at in Global Entrepreneurship Monitor, or GEM, Global Report 2020-2021.

According to the GEM report, the Kingdom ranked first out of 45 countries in the following categories: Availability of good opportunities to start a business, ease of starting a business, business response to the pandemic, and government response to the pandemic.

It ranked second in individual skills and infrastructure and third in the following categories: Ease of access to corporate and business finance and ease of access to markets and market dynamics. It was placed fourth out of the 45 countries for government support for business and lack of barriers and ease of regulations for market access.

The Kingdom also ranked first worldwide in the response of government and entrepreneurs to the pandemic and seventh in entrepreneurial progress, stated the report.

Charging the atmosphere

Besides Monsha’at, Saudi Aramco is looking at avenues to diversify the Kingdom’s economy by encouraging Wa’ed, its entrepreneurship program.

Late last year, it organized a nationwide tour to spot tech-focused startups from diverse industrial sectors and bring them to the mainstream. The reward on the stake was SR7.65 million. The winners included Slates, a web browser extension that allows people to save, curate, and share their Internet discoveries in organized collections with notes in a single URL. The company bagged SR75,000.

“By supporting the most disruptive and tech-focused Saudi-based startups and opening applications to all qualified entrepreneurs, Wa’ed’s Entrepreneurship roadshow was the perfect opportunity to provide them with the needed financial and entrepreneurial support to grow,” said Fahad Alidi, managing director at Wa’ed.

The digitalization wave

The only dampener to the entrepreneurship campaign was that much of the business activity was centered on consumer-oriented trades. According to the GEM’s KSA 2020-2021 report, entrepreneurship and established business activities in the Kingdom show low participation in medium and high-technology sectors.

Recently, Monsha’at pointed out that digitalization is actively pursued in the region and soon entrepreneurs can leverage these means to develop, deploy and thrive on new business models, effective collaborations, and the continued recovery.

The mood on the ground was best conveyed by Adib Al-Zamil, chairman of Jadwa Investment, an investment services company. He said: “It seems that everyone nowadays is really talking about IT-enabled technologies. And the young men and women of this country are very much tuned to this industry, they understand it, they like it.”