Small and medium enterprise banking

2022 saw the Small and Medium Enterprise (SME) sector of Alinma Bank achieve many developments to improve performance and enhance the customer experience. These developments came in the form of a new SME structure, new products and partnerships and an improved workflow to support the management and operational aspects of the sector. The sector has also continued to reap the benefits of the strategic partnership with the Kafalah SME program which positively influenced the performance of the sector in terms of growth, profitability, risk and coverage.

In line with the SME sector’s new structure, a new SME Sales Network was formed to manage all program-based lending products. This Sales Network mainly targets micro and small enterprise clients by offering them different products with less regulatory requirements and flexible approval procedures to fulfill their financial needs.

The sector successfully introduced six new products in 2022, to serve the unique needs of SMEs across different sectors. These include:

The SME sector entered into multiple partnerships and agreements with different entities which led to agreements with the Agricultural Development Fund, increasing the cooperation with the General Authority for Small and Medium Enterprises (Monshaat) by increasing financing opportunities through the financing portal, and expanding the financing for small and medium enterprises under the umbrella of the KAFALAH program. These partnerships reaffirm the Bank’s commitment to support all government initiatives, especially those that serve the Kingdom’s 2030 vision and goals.

In achieving the milestones for 2022, the SME sector underwent significant improvements and enhancements to improve workflow and manage operational difficulties. These included the:

• Setting up of a new approval fast track to facilitate and expedite the approval process by providing more authority to the business
• Redesigning and improving the process flow to be more efficient and effective in terms of flexibility and quality
• Improving the RMs' skills by offering intensive credit programs specially designed by Moody's Analytics
• Participating in different events to offer our services and products and increasing the SME market share (Ex: Hajj and Umrah Services Conference and Exhibition, and The International Franchise Expo)

Increased rates were a challenge during 2022 as it negatively affected clients’ ability to re-utilize the granted facility limits. Other challenges included aggressive competition from traditional banks and some newcomers including fintech platforms. Therefore, the Bank was keen, through its strategic vision 2025, which focused on digital transformation and automated banking operations in the SME sector, to enhance the digital customer experience to keep pace with the transformation taking place in the banking sector, and to ensure that the Bank is the fastest and most convenient choice in the Kingdom of Saudi Arabia for all customers by 2023.

Although the market continued to recover from the effects of COVID-19 in 2022, the Bank continued to pay close attention to SMEs that were aggressively affected by the pandemic and offered additional financing by way of rescheduling or restructuring transactions to help these entities to recover and get back on track. Alinma Bank also provided clients with subsidies through programs initiated by SAMA, including the Deferred Payment Program (DPP) and the Guaranteed Loan Program which was extended for a further year from March 2022.