Riyadh, Saudi Arabia – Alraedah Finance Company and Saudi Kuwaiti Finance House (SKFH) signed a strategic agreement to establish a closed-ended investment fund which aims to invest SAR 300 million to support small and medium-sized enterprises (SMEs) across all sectors in the Kingdom of Saudi Arabia.
Armed with this objective, CEO of Alraedah – Paul Melotto, and Mr. Dahir Al Khaldi – representing Saudi Kuwaiti Finance House, signed the investment agreement, aligning the entities with the shared goal of enhancing and empowering SMEs to further stimulate the local economy.
Under this agreement , Alraedah will be the operator of the fund’s asset, adhering to the provisions, programs, and services it provides in the field of financing and within the framework of Islamic Sharia law. Aseel Capital, represented by Mr. Khalid Al Homaid, Chief Investment Officer at Aseel Capital, will distribute part of the units of this closed-ended investment fund to individual investors through collective investment through its innovative digital platform. Aseel Capital is known for providing innovative financial solutions through the use of technology in crowdfunding, as its digital platform provides an easy and convenient way for retail investors to access mutual fund units. Aseel Capital plays an important role in enabling individuals to achieve their investment and financial goals with ease.
Saudi Kuwaiti Finance House, a leading capital organization in the industry and one of the Kingdom’s fastest-growing financial companies, will cover the fund’s capital in cooperation with Aseel Capital, through a private placement according to the regulations of the Capital Market Authority. They will also provide all necessary information and disclosures to ensure transparency and prepare the fund’s structure, terms, conditions, and the most suitable investment process. A key defining element of this agreement is the fund’s target of 14% quarterly dividends, the highest in the market.
Commenting on the agreement, Wail Hilal, Head of Asset Management of Saudi Kuwaiti Finance House, explained emphasized the importance of small and medium-sized enterprises in the Kingdom of Saudi Arabia, stating how they “play a key role in economic growth, job creation, and development, having a direct impact on local communities, and being a gateway for economic innovation”. Small and medium enterprises in the OECD countries constitute about 99 percent of the total enterprises, and they are considered the main source of employment, providing about 70 percent of jobs. Moreover, in emerging economies, SMEs contribute about 45 percent of total jobs and about 33 percent of GDP.
Alraedah’s CEO, Paul Melotto, reinforced during the ceremony how the company “is a leader in financing the SME sector in the Kingdom and acts as a key contributor to Vision 2030 goals to incentivize SME development.” With a target of 35% contribution to GDP by the Kingdom’s SME sector by 2030 (equivalent to SAR 2.1 trillion), Melotto stressed that “SMEs face challenges in scaling their business or expanding their operations. Alraedah aims to support the long-term and sustainable growth of SMEs by offering innovative financial products and services tailored to market needs”. As part of the Kingdom’s ambitious plans that shape Vision 2030, the Government of Saudi Arabia has launched multiple programs to encourage the development of small and medium enterprises, with a specific target for 2030 for SMEs to reach 35% of GDP (equivalent to SAR 2.1 trillion). As a service shortage, SMEs face multiple challenges when scaling their business or growing their operations. This is where Alraedah plays an essential role in supporting SMEs to achieve long-term and sustainable growth, by offering innovative financial products and services that anticipate and proactively address market needs while eliminating existing vulnerabilities.
The strategic approach adopted by Alraedah aims to expand the formation of integrated partnerships with investment entities in the banking and finance sectors according to strategies and plans commensurate with the new trends in the market, pointing to the company’s keenness to form an advanced approach to its products that distinguishes its performance and financing activities in line with the aspirations of its customers.
Mr. Khalid Al Homaid, Chief Investment Officer at Aseel Capital, expressed that “through this partnership, we aim to enable SMEs to achieve their strategic and financial goals, which enhances their stability and ability to contribute to the sustainable economic development of the Kingdom and create more job opportunities. Aseel Capital believes that this partnership will contribute to supporting growing companies and enhancing their role in the economy,” Al Homaid concludes. Aseel Capital will continue its efforts to provide sustainable and innovative financial and investment solutions through collective investment that meet the needs of investors and contribute to the sustainable growth of the local and regional economy.
Alraedah is dedicated to supporting the growth and development of SMEs in Saudi Arabia. With an unwavering commitment to service excellence, they provide comprehensive Shariah-compliant financing solutions and are licensed by the Saudi Central Bank (SAMA). Alraedah continues to expand its services, products and workforce of expert financial advisors to further champion SMEs in the Kingdom.
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