Funding Souq has announced a strategic partnership with the Kafala Program aimed at bolstering investment in Saudi Arabia's small and medium businesses (SMEs). The collaboration introduces a risk-mitigating guarantee mechanism, which will guarantee up to 50% of the capital invested by Funding Souq's investors in a curated selection of investment opportunities.
Under this new agreement, investors can now achieve their targeted returns with half the risk, thereby making it a more attractive proposition for those interested in supporting the growth of Saudi SMEs. The initiative is expected to not only drive economic prosperity but also empower small businesses to thrive.
"We are grateful to the Kafala team for their visionary approach and commitment to supporting the SME sector," said Martin Jaouni, the founder of Funding Souq. "This partnership is a testament to our shared goal of driving economic prosperity by empowering small businesses to thrive."
The key objectives of this agreement include creating solutions that enable SMEs to obtain support with a guarantee from the Kafala Program and encouraging investment through crowdfunding. Additionally, the partnership aims to explore cooperative strategies and identify integration mechanisms between the Kafala financing guarantee program and Funding Souq, motivating enterprises through the platform.
One of the standout features of this collaboration is the acceleration of the credit decision process to less than one business day. This will be achieved using the latest technologies and electronic linkages with credit bureaus, as well as electronic signatures through platform integration.
Funding Souq, known for its Shariah-compliant SME financing and investment platform, connects established businesses with retail and institutional debt investors. By providing accessible small business loans, the platform aims to fuel SME growth and drive economic prosperity not only in Saudi Arabia but also in the broader Gulf region.
This partnership holds significant implications for the Saudi SME sector. By reducing investment risks, it attracts more capital to small and medium businesses, which are often considered the backbone of the economy. This collaboration is poised to create a more vibrant and robust financial ecosystem, ultimately contributing to Saudi Arabia's economic diversification goals.
