StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Financial Support for SMEs and their Development Role in Saudi Arabia - Dissertation Example

Cite this document
Summary
The dissertation "Financial Support for SMEs and their Development Role in Saudi Arabia" focuses on the critical analysis of the role of SMEs in the development of the Saudi Arabian economy and to check whether the Saudi government and financial institutions are supporting SMEs or not…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.8% of users find it useful
Financial Support for SMEs and their Development Role in Saudi Arabia
Read Text Preview

Extract of sample "Financial Support for SMEs and their Development Role in Saudi Arabia"

Download file to see previous pages

Isenberg (2011) has stressed the fact that role of SMEs in developing economies increases in a manifold manner for those countries where the scope for other large and capital intensive industries is small. Szabo (2006) has pointed out that Saudi Arabia is the largest economy Gulf Cooperation Council (GCC) and the government of the country has extended its support to the development of SMEs in the last couple of years. The surprising fact is that, despite being the fact that there is huge potential for growth for SMEs in Saudi Arabia but SMEs still contribute less than 30% of total employment (Isenberg, 2011).

Although SMEs contribute almost 90% of the business of Saudi Arabia the industry contributes only 33% of Saudi Arabia’s gross domestic product (GDP) (Isenberg, 2011). Historical analysis of the research paper shows that to date less than 1% of research papers are presented by focusing on the business condition in Saudi Arabia (Ahmad and Xavier, 2011). Hence, there is no surprise that there is large research gap exists in the field of business operation of SMEs in Saudi Arabia. The existence of such gaps has influenced the researcher to take on this paper and conduct research to fill the gap up to a certain scale.

Gulf areas in general and Saudi Arabia in particular, are oil-rich regions with the economy being driven by the large oil-producing organizations. The required financial support for the SMEs, to strengthen their capability to further contribute towards the progress of Saudi Arabia’s economy, is however somewhat lacking. Research scholars have tried to establish a common definition of SMEs but it is very difficult to establish a common definition of Small and Medium Enterprise (SME) in the context of gulf countries.

Ahmad (2012) has defined SMEs as an enterprise that employs 1 to 100 workers and revenue of up to 20 million Saudi Riyals. However, other researchers have argued that it is not possible to classify SMEs based on revenue because the nature of business differs from SMEs to SMEs in the Saudi Arabian region. Hence, it can be evaluated that it is very difficult to establish a standard definition of SME in the Arabian context.According to the above discussion, it is very difficult to establish a concrete definition of SMEs which can be used as a standard for SMEs across the globe.

In such context, the perplexity of defining characteristics and criteria of SMEs has increased to a further extent when Fu (2011) argued that defining SMEs differs from country to country and is based upon different variables such as the number of employees, revenue, nature of trade, etc. Hertog (2010) has also pointed out that there is no official definition of SMEs in Saudi Arabia. Shalaby (2004) has stated that Saudi Arabian government uses various quantitative criteria to define SMEs such as the number of workers, revenue, types of business, etc.

Although there is a conflict of opinion regarding the definition of SMEs in Saudi Arabia researchers have agreed with the fact that SMEs in Saudi Arabia face challenges regarding accessing finance. Although SMEs signifies the spirit of entrepreneurialism within the society and outlines as to how the new startups result into the creation of economic capital for the country but still a financial institution of Saudi Arabia perceive SMEs as a high-risk borrower. Hence, these financial institutions show reluctance to lend money to small business owners.

Hence, it can be evaluated that SMEs of Saudi Arabia are facing challenges in terms of lack of economic and government support.

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The financial support for SME's and their development role in Saudi Dissertation”, n.d.)
The financial support for SME's and their development role in Saudi Dissertation. Retrieved from https://studentshare.org/business/1479180-the-financial-support-for-sme-s-and-their
(The Financial Support for SME'S and Their Development Role in Saudi Dissertation)
The Financial Support for SME'S and Their Development Role in Saudi Dissertation. https://studentshare.org/business/1479180-the-financial-support-for-sme-s-and-their.
“The Financial Support for SME'S and Their Development Role in Saudi Dissertation”, n.d. https://studentshare.org/business/1479180-the-financial-support-for-sme-s-and-their.
  • Cited: 0 times

CHECK THESE SAMPLES OF Financial Support for SMEs and their Development Role in Saudi Arabia

Saudization and the Saudi Arabian Kingdom Development

In April 2000, therefore, the government established the Saudi Arabian General Investment Authority to encourage foreign direct investment in saudi arabia, and as of November 2005, Saudi Arabia was formally permitted to join the WTO (Al-Asmari, 2008).... Saudization and the Saudi Arabian Kingdom Development As a young wealthy nation, saudi arabia has a number of social and economic problems.... This essay will discuss as to how the process of Saudization can help to create jobs and support the national economy of saudi arabia, a country in the Middle East....
8 Pages (2000 words) Essay

Annotated bibliography

The article aims at demonstrating the need for launching of Small and Medium Enterprises (SMEs) Authority in saudi arabia.... , which showed that SMS comprise 90% of all businesses in saudi arabia.... The article points out how lack of SME authority has affected SMEs in saudi arabia.... The major effect has been lack of support services and financing programs, which has led to the poor performance of SMEs in saudi arabia.... Importance of an SME Authority for saudi arabia, [Online] Available at: http://www....
5 Pages (1250 words) Research Paper

Support for Small and Medium-Sized Enterprises

However, there are some aspects of efforts and decisions have been made by the government and private sectors in saudi arabia to encourage citizens to establish small to medium- sized businesses.... There are a large number of researches and studies have discussed the issue of Support for Small and Medium-sized Enterprises (SMEs), the kind of support for smes according to them is various from country to another.... The importance of support for smes is under the implicit assumption that SMEs are vital for the economic development and the health of the economy, and that support given to SMEs has a significant role in ensuring a healthy SME sector (Lauder et al....
24 Pages (6000 words) Case Study

Literature review(The financial support of SMEs and their development role in Saudi Arabia)

The required financial support for the SMEs, in order to strengthen their capability to further contribute towards the progress of Saudi Arabia's economy, is however somewhat lacking.... ulf areas in general and saudi arabia in particular, is an oil rich region with the economy being driven by the large oil producing organizations.... ithin saudi arabia, various organizations define SMEs according to different criteria and are followed by different organizations....
4 Pages (1000 words) Research Paper

The Financial Support for the SMEs

The aspect of financial support for the SMEs in the economy of Saudi Arabia and the developmental role played by the SMEs in the development of Saudi economy are important areas of study for this research work.... In comparison to the other countries in the Gulf region, the SMEs in the Kingdom of saudi arabia have contributed in a low proportion to the economic development of the country.... In the Kingdom of saudi arabia, the small and medium enterprises are categorized according to specified criteria designed by the Saudi Industrial Development Fund (Burke and Jarratt, 2004, p....
15 Pages (3750 words) Research Proposal

The Chamber Of Commerce Role To Develop SMEs In Saudi Arabia

The paper "The Chamber Of Commerce Role To Develop SMEs in saudi arabia" focuses on the issues that the SMEs face and the factors that impact the external funding of the companies.... It is clear and evident that the SMEs of saudi arabia have been clearly facing a number of issues relating the financial aspects.... he research findings and analysis has brought out some major aspects of smes and also expresses the difficulties that SMEs face in obtaining finances from external sources....
66 Pages (16500 words) Dissertation

The SME Authority in Developed Countries and in Saudi Arabia

This paper ''The SME Authority in Developed Countries and in saudi arabia'' demonstrates the need for the launching of the Small and Medium Enterprises Authority in saudi arabia.... The article points out how the lack of SME authority has affected SMEs in saudi arabia.... A significant major effect has been a lack of support services and financing programs, which has led to SMEs' poor performance in saudi arabia.... It is based on the findings of research by capital group international, which showed that SMS comprises 90% of all saudi arabia businesses....
5 Pages (1250 words) Annotated Bibliography

The Financial Support of Enterprises in Saudi Arabia

The paper "The Financial Support of Enterprises in saudi arabia" states that overall lending share for SMEs is relatively low in GCC and Saudi Arabia.... This paper is presented with a brief overview of studies and researches previously conducted on the subject through a literature review of SMEs, in general; the financial support of the government for SMEs in saudi arabia; and the role that SMEs play towards the development of the country.... Their definitions would be explored, including financial support and development role in the economy of Saudi Arabia....
6 Pages (1500 words) Research Proposal
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us