Financing small businesses in Saudi Arabia
The overwhelming dependence of Saudi Arabia on oil exports as the onlysource of national income has exposed the Kingdom's economy to seriousexogenous shocks. In order to reduce the impact of this externaldisruption, the Government, through successive five-year developmentplans, established the basic physical infrastructure necessary fordeveloping the real and financial sectors. At the same time, itencouraged the private sector through various incentives to participatein the development process.As government spending started to decline after 1982, the Governmenturged the private sector to take a more prominent role in the futuredevelopment process. So as to sustain economic growth.Small businesses, as a large segment of the private sector, can play asignificant role in this. This study aims to provide guidelines toassist planners, decision makers and bankers in Saudi Arabia to design aprogramme which will ensure effective participation of small businessesin the development process.To achieve this goal, the study concentrates on identifying the mainobstacles encountered by small businesses in their efforts to financetheir projects internally, or to have access to external sources offinance. It also seeks to identify the main constraints that preventthe government credit institutions and commercial banks from providingadequate finance to small businesses.By linking the demand side for finance, represented by small businesses,with the supply side, represented by commercial banks and governmentcredit funds, the gaps in the lending system as a result of theimbalance between these two sides are identified. Options for fillingthese gaps are then considered.
Year of publication: |
1989
|
---|---|
Authors: | Hajjar, Bandar M H. |
Publisher: |
Bandar Hajjar |
Subject: | Small businesses | Saudi Arabia |
Saved in:
freely available
Saved in favorites
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