Kafala Program

Best Financing Programs that empower your business

What is Kafala?

The Small and Medium Enterprises Financing Guarantee Program by Kafalah was founded under His Excellency the Minister of Finance's decision number (1166) dated 04/05/1425 AH, in a view to overcome any obstacle in financing SME that are economically viable but that do not have the ability to provide the required guarantees to the financing entities.

The program aims at helping SME's in obtaining the necessary Islamic financing to develop and expand their activities, and at encouraging the financial institutions to deal with the SME sector, in addition to attracting a new group of owners of SME that have not previously dealt with financing entities. Thus, the goal of the program is to be achieved in developing the SME sector in a view to activate its important role in the national economy through its contribution to providing new job opportunities, developing provinces that are least active economically.

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.
  

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

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)

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 SNB or any other bank
   
4. The enterprise and its feasibility study must be economically and commercially viable
5. The tot​al sales / revenue of the enterprise must be under SR 200 million​

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