Sign In

Kafala Program

Best Financing Programs that empower your business


What is Kafala?

Kafala Program is a financing program to Micro, Small and Medium Enterprises (MSMEs) within the Kingdom of Saudi Arabia. It is a collaboration between the Ministry of Finance, represented by the Saudi Industrial Development Fund (SIDF), and the Saudi banks. Through Kafala, SNB offers credit facilities to the client and simultaneously Kafala Program will issue a guarantee to the bank, covering up to 1.6 million.


Kafala Program's Objectives

Kafala aims at achieving the below objectives:


  • Helping MSMEs to obtain Islamic finance for growing and expanding their activities.

  • Empowering the local enterprises to promote their competitive capabilities, which will be inevitably reflected in the Saudi local economy.

  • Supporting the MSME sector to assume their important mandate to contribute in the development of the local economy.

  • Increasing job opportunities by training and hiring Saudi citizens.

  • Expanding and growing the MSMEs that have businesses in the promising fields.

  • Encouraging financial institutions to work closely with MSMEs.

  • Achieving integration with corporate businesses.

  • Increasing imports' variety in the economy.


Financing Process

  • The business owner applies directly to SNB with the required documents.

  • SNB studies and analyzes the applicant's request, according to the Bank's policies.

  • After approving the required finance, the Bank applies to SIDF for the issuance of a Kafala guarantee, along with the written approval from the business owner accepting the Kafala program. (Forms are available at all SNB branches or can be downloaded from our website).

  • After evaluating the business owner request and verifying that it adheres to the program policies, the SIDF will issue or refuse the required Kafala to the Bank.

  • The last step is that the credit-line agreement will be signed by the Bank and client to obtain the finance.

Apply Now

Kafala Definition

  • Kafala Program is a collaboration between the Ministry of Finance, represented by the Saudi Industrial Development Fund (SIDF) and Saudi banks, which aims to promote financing to Small and Medium Enterprises (SMEs) within the Kingdom of Saudi Arabia.

  • Through this program, the bank will offer credit facilities and simultaneously,Kafala Program will issue a guarantee to the bank, covering up to 1.6 million.

Objectives of the Kafala Program

  • Helping SMEs to obtain Islamic finance for developing and expanding their activities.

  • Participating in the competitive abilities of local enterprises which will be positively reflected in the local economy.

  • Developing the SME sector to achieve the core objectives in supporting the local economy.

  • Increasing job opportunities by training & hiring Saudi citizens.

  • Expanding and developing the businesses of SMEs in promising areas.

  • Encouraging financial institutions to work closely with SMEs.

  • Achieving integration with corporate businesses.

  • Increasing imports’ variety in the economy.

FINANCING PROCESS

  • The business owner applies directly to the bank with the required documents.

  • The bank studies and analyzes the applicant’s request, according to the bank’s policies.

  • After approving the required finance, the bank applies to SIDF for the issuance of a Kafala guarantee, along with the written approval from the business owner accepting the Kafala program. (forms are available at all SNB branches or can be downloaded from our website). 

  • After evaluating the business owner request, and verifying that it adheres to the program policies, the SIDF will issue or refuse the required Kafala to the bank.

  • The business owner may be asked by SIDF to provide the necessary guarantees, including any collateral. 

  • Finally, the credit-line agreement will be signed by the bank and customer to obtain the finance.



Features & Benefits


  • The most distinguished feature of Kafala Program is the finance period that reaches 7 years. However, the period may be extended subject to the Bank's approval. The finance amount, period and cost will be determined by the bank based on reviews of financial documents.

  • One enterprise can obtain more than one finance product, provided that the total Kafala amounts of the enterprise must not exceed SAR 15 million.

Kafala Purposes


SNB offers Kafala program to achieve the below purposes:

Funded Facilities:

1)   Working Capital finance (short term - less than a year)

       a. Bill proceeds financing

       b. Operating expenses financing

2)   CAPEX financing (medium term - from 1 to 3 years)

       a. Financing the purchase of machinery and equipment

       b. Financing the opening, equipping and expansion of new branches

Non-Funded Facilities:

1) Letters of Guarantee (Bid Bond / Final / Financial / Advance Payment)

2) Letters of Credit (Sight / Deferred)


Apply Now

Features & Benefits

  • The maximum finance period for the program is 7 years, however, the period may be extended subject to bank's approval. The finance amount, period and cost will be determined by the bank based on reviews of financial documents.

SNB offers Kafala Program financing for the following purposes:  

Financing Tangible Fixed Assets:

  • Helping enterprises to finance their fixed assets such as (buildings, civil work & machinery…etc.) in order to enhance their production capacity.  

Financing Non-Tangible Fixed Assets:

  • Financing investment in industrial designs, marketing, and innovation…etc.

Financing Working Capital and Operating Expenses

Financing is also available for:

  • Commercial ‘Tayseer’ (short, medium & long term).
  • Facilities to issue Letters of Guarantee.
  • Facilities to issue Letters of Credit.

Each enterprise can obtain more than one Kafala finance, and that the Kafala coverage provided by SIDF does not exceed SR 1.6 million.


Apply Now

Applicant Criteria

Below are the conditions that the enterprise must meet to obtain Kafala Program finance:


  1. The enterprise shall possess balance sheet
  2. The enterprise must be under a legal entity (Sole Proprietor, Partnership Company, Limited Liability Company…etc.)
  3. The customer must have a clean credit history with NCB or any other bank
  4. The enterprise and its feasibility study must be economically and commercially viable
  5. The total sales / revenue of the enterprise must be under SR 200 million
*Note that granting of financing is subject to the credit policy of the bank

 

Eligible Business Activities for the Program

The activities covered by the Kafala Program include the following:


  • Industry of all kinds

  • Activities that serve the agricultural sector

  • Commercial activities

  • Education

  • Oil, gas and mineral wealth

  • Construction and Contracting

  • Transportation

  • Service activities

  • Medical facilities (private clinics - private hospitals - medical centers)

*(All activities with annual revenues do not exceed S.R. 200 million)

 

Non-Eligible Business Activities for Kafalah Program


  • Activities that are not under MSMEs

  • Activities owned by the government

  • Speculation activities (buying and selling of currencies or shares, real estate, and financing projects)

 

Required Documents to obtain Kafala Finance Program

The below documents must be provided by the enterprise:

  • Copy of owner / owners National ID

  • Copy of Commercial Registration

  • Copy of company's founding contract (if the establishment is a company)

  • Financial statements (audited - internal) for the previous two years

  • Copy of financial statements (existing projects)

  • Copy of a bank statement of customers who do not have accounts with the bank

  • Property documents (real estate, cars, machinery, equipment)

  • Any other requirements requested by the bank

For more information on Kafala Program, we welcome your call at AlAhli Phone Banking:

Corporate Contact Center:  920024288

Point of Sale Contact Center:  920000856

SAMA SME initiatives Contact Center:  8002440112


APPLICANT CRITERIA

  1. The enterprise shall possess balance sheet audited for 3 years​.
  2. The enterprise must be under a legal entity (Sole Proprietor, Partnership Company, Limited Liability Company…etc.).
  3. The customer must have a clean credit history with SNB or any other bank. 
  4. The enterprise and its feasibility study must be economically and commercially viable. 
  5. The total sales of the enterprise must be under SR 30 million per annum.

Eligible Business Activities for the Program

  • Manufacturing
  • Agriculture
  • Trade
  • Education
  • Petrol, Gas and Mineral Resources
  • Building and Contractors
  • Transportation
  • Services
  • Medical (private clinics, private hospitals, medical centers)

Non-Eligible Business Activities for the Program

  • Activities that are not under SMEs.
  • Activities owned by the government.
  • Speculation activities (buying and selling of currencies or shares, real estate, and financing projects)

REQUIRED DOCUMENTS FOR KAFALA PROGRAM FINANCING

  1. Copy of ID.
  2. Copy of Commercial Registration.
  3. Copy of Article of Association and Board of Resolution in the case of Companies & Partnerships.
  4. Copy of Business Activity License.
  5. Copy of the last three years financial statements for outstanding project.
  6. Projected cash flow statements (if available).
  7. Sales Deeds such as real estate, vehicles, machinery... etc. (if applicable).
  8. Any other requirements from the bank.

For more information:

Contact us at AlAhli Phone Banking: 8002441005 


SIDF: Kafala Program for Financing SMEs

Address: Riyadh, Makkah Road

P.O. Box 395 Riyadh 11411

Phone: 0112917676

Fax: 0112910891

E-mail: sme@AlAhli.com​​


Apply Now