• Move seen as key part of plans to diversify economy away from oil and to help create jobs

Fatima Muhammad

RIYADH: Saudi Arabia’s Public Investment Fund (PIF) has launched a new investment vehicle aimed at boosting small and medium enterprises (SMEs) in the Kingdom.

It will invest in venture capital and private equity funds geared towards small businesses.

The SR4 billion ($1.07 billion) “Jada” initiative is the latest move by the government to support SMEs, seen as a key part of plans to diversify the economy away from oil.

“Jada is the first instrument of its kind in the Kingdom,” the PIF said in a statement. “It is a catalyst for small and medium enterprises, seeking to secure rewarding incomes, to ensure financial sustainability and support the Kingdom’s priorities in terms of supporting small and medium enterprises.”

It said that the aim of the initiative was to help create jobs and diversify the economy.

Business leaders across the Kingdom have welcomed the move.

“Jada” is a long-anticipated step to support this sector, which is the backbone of the economy,” said Helmi Nato, a member of the business youth committee at Jeddah Chamber of Commerce and Industry.

Saudi Arabia’s Vision 2030 blueprint for economic and social reform aims to increase the contribution of the SME sector to overall GDP to 35 percent from 20 percent.

The government also wants financial institutions in the Kingdom to allocate up to 20 percent of overall funding to SMEs.