An important Milestone has been set in the field of risk management for Saudi Arabia. A Memorandum of Understanding was signed today between small & medium enterprises loan guarantee program “Kafalah” and Tawuniya Insurance Company which will provide strong support to the SME sector and the county’s economy.
This deal is the first of its kind in the Kingdom of Saudi Arabia for providing insurance protection covering the small and medium enterprises overseen within Kafalah’s program which will facilitate and speed up the process in which SME’s will acquire support through minimizing their risks by proper insurance.
This MoU also represents a breakthrough in creating mechanisms for sharing and analyzing statistics and data, which plays a role in facilitating the development of the small and medium enterprise sector, particularly with regard to insurance. This allows for the analysis and management of risks facing such enterprises with much greater efficiency. The importance of this sector is demonstrated by the fact that the SME’s represent 90% of the total economic enterprises in the Kingdom and accounting for 28% of GDP.
The Memorandum of Understanding was signed by the Director of the Kafalah program, Eng. Osama A. Al- Mubarak and the Tawuniya CEO Mr. Raed Abdullah Al Tamimi at the Tawuniya headquarters in Riyadh.
Director of Kafalah, Osama Al Mubarak, stated that the Kafalh’s role isn’t purely limited to providing grantee for the projects funds. He said “the initiative extends to enhancing integration and cooperation between those entities responsible for supporting the small and medium-sized enterprises sector. This occurs through providing the facilities required for success of these entities across the Kingdom, while simplifying processes and offering services, such as providing guidance and young business men training.
Tawuniya’s CEO Raed Abdullah Al Tamimi expressed his pleasure at signing this MoU which he said would play a role in activating mechanisms of support for national projects, while providing Tawuniya’s insurance expertise to businessmen in small and medium-sized enterprises. “This will increase their capabilities to control and manage risks effectively, so as to provide comprehensive protection to their activities and enhance their efficiency”. He noted that the training program for raising awareness about insurance would be particularly important.
Al Tamimi pointed out: “This Memorandum of Understanding is in harmony with Tawuniya’s pioneering role in supporting entities involved in economic development. The business development sector is one of the key economic domains and its success is dependent on holistic support from all the key economic entities”.
He added: “Tawuniya is working to create a culture of risk management and insurance awareness. This is achieved through genuine partnerships and a broad range of insurance services and solutions matching with the requirements of the private sector – and in particular small and medium enterprises which have a particular need for efficiency in managing resources and budgets. Managing operational and financing risks is a prerequisite to the continuing prosperity of this sector and the well-being of the national economy”.