In a meeting organized by the Youth Business Council of the Asharqia Chamber:
Banker Expert: Small and medium enterprises in front of several options for funding
The Vice President of Emerging Business Banking at Riyad Bank, Madha Al-Shammari, stressed the necessity to deal with the current economic situation completely objectively. Calling for plans for financing and management, based on consulting with partners, thinking outside the fund, and diversification in everything.
This came during a remote meeting organized by the Asharqia Chamber represented by the Business Youth Council (Sunday 6/6/2020), as he said that any economic establishment (small, medium or large) is well aware of the existence of certain risks, which may be out of control, and maybe sudden and not Expected, such as market changes, price fluctuations, and therefore it must be at the level of the event in the management of cash flows and cost management and the like. Noting in this area that these economic cycles provide – as well – many opportunities, difficult circumstances create unexpected opportunities It may be valuable, except that the most important thing is our reaction – as institutions – and how we deal with it. We must put in place clear “scenarios” toward the crisis and the assumption of its expansion.
Al-Shammari indicated in the meeting moderated by Abdulaziz Al-Bassam, a member of the Youth Business Council, that small and emerging institution in particular – are obligated to develop specific plans for the future, and that they are based on consultations by internal partners (employees) and external (suppliers and customers) alike, and away from The unilateral decision, whatever the circumstances, and that we clearly put its financing options before we reach the crisis.

He stated that adapting to the circumstances comes from setting plans for diversification in everything, in contracts (long, short, and medium), in sources of raw materials, activity (selling, buying, maintaining, importing … etc), in the workforce, and in partnerships, diversification is a source of strength and source guarantee of continuing.
Al-Shammari pointed out in this field that the institutions are concerned with benefiting from all the initiatives presented by government institutions, especially at the financing level. All government agencies have undertaken initiatives aimed at supporting the economy, maintaining the continuity of the activities of the institutions, and then preserving their gains … noting a number of programs that It was provided by the Saudi Arabian Monetary Agency, which aims to provide liquidity to companies, especially small ones, with which banks responded, including postponing financial claims for a period of six months, and bearing the payments due from the guarantee program, and so on.
He added that the banks interacted with the initiatives of the institution and postponed the payments not covered by the initiatives of the institution, and even increased the scope of their support for small and medium enterprises, including facilitating lending procedures, and providing more technical consultations, therefore the opportunity at the present time is available for small and medium enterprises to benefit from the banks’ programs that Do not set any additional requirements, as it is sufficient for the beneficiary to have a working bank account statement, through which he is entitled to financial support from the bank that does not even require financial statements … expressing a note that some small and medium-sized institutions confuse the personal account and the commercial account, so it deprives itself of Funding opportunities by the bank, which loses the ability in this regard to separate personal expenses from commercial activity.

Accordingly, Al-Shammari sees the need for small and medium enterprises to benefit from these initiatives, by consulting those involved and making decisions and setting specific plans … explaining that the abundance of liquidity is not only from funding, because financing solutions are diverse, including amending some agreements with suppliers, increasing the number of partners, Extending the periods of repayment, borrowing or investment, mergers, as well as the presence of financing channels and programs implemented by some government agencies for emerging facilities in particular, and all of these options are available to companies.
In this regard, Al-Shammari called on companies to place financing options within their initial plans, and do not wait for a specific crisis during which they are in urgent need and then search for options .. suggesting that resorting to borrowing or dealing with banks or financing bodies should be done in order to develop the activity and that The beginning is with little capital until the idea’s worthiness and success are confirmed.
He praised the existing solidarity and great cooperation between the various sectors to confront the pandemic … pointing out that the financing of small and medium enterprises was at 2% of the total financing when the vision of 2030 appeared and the hope was that we would reach 5% in the current year 2020 so it was reached the last year 2019 and was Achieving 7% at the beginning of this year, and we hope to reach the specified percentage in the vision during 2030, which is 20%.

Source: Asharqia Chamber

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