Kafalah

What Kafalah does

Kafalah is the Saudi Arabian government's flagship SME financing guarantee program, established by Royal Order in 2001 and formally launched under Minister of Finance Decision No. 1166 in 2005. It is managed by the SME Bank (established February 2021) within the National Development Fund and operates as a non-profit developmental initiative aligned with Saudi Vision 2030's goal of raising SME contribution to GDP from 20% to 35%. The program issues guarantees covering 80-95% of financing risk on loans made by 69+ partner banks and financing companies to micro, small, and medium enterprises that are economically viable but cannot meet conventional collateral requirements. By the most recent disclosures, Kafalah has supported over 26,500 cumulative SMEs, holds SAR 30 billion in active guarantees, and contributed SAR 3.6 billion in value to Saudi GDP with claims of 1.7 million+ jobs enabled.

The product portfolio spans a general Kafalah Regular product (80% coverage, all sectors), a Working Capital product (90%, up to SAR 15M for medium enterprises), a Start-Up Enterprises product (for businesses under 3 years old), and seven sector-specific guarantees covering Export, Technology, Consulting, Culture, Tourism, Entertainment, and Awqaf/Non-Profit sectors, each with up to 90-95% coverage. Distribution is exclusively channel-based: SMEs apply through any cooperating bank or financing company, or via the TamweelGate electronic portal supervised by SME Bank. The program's technology layer includes TamweelGate (a marketplace platform), a Knowledge Base system, and a behavioral credit classification system developed with SIMAH in 2023 to automate guarantee decisions and predict default probability. The 'Moahel' tool offers SMEs a probability-of-approval assessment, while the 'Nabaa Service' provides broader financing support.

The business model is non-profit and government-funded; Kafalah charges nominal annual administrative fees to financing entities (not to SMEs) for application review and follow-up services. The program does not target profit and operates as a state-mandated policy instrument rather than a commercial entity. Go-to-market is partnership-driven through 13+ partner banks (including NCB, Al Rajhi, Riyad Bank, Alinma, SABB, AlJazira, Bank AlBilad, Saudi Investment Bank, Saudi French Bank) and 20+ partner financing companies, supplemented by strategic cooperation agreements with sectoral authorities (Tourism Development Fund, Cultural Development Fund, General Entertainment Authority, SABIC) and universities. Customer segments are primarily horizontal by enterprise size (micro 1-5 employees, small 6-49, medium 50-249) with specialized products for startups, women entrepreneurs, and SMEs in 'promising regions' outside major cities.

Name

Kafalah

Legal name

Kafalah SME Financing Guarantee Program (برنامج كفالة لتمويل المنشآت الصغيرة والمتوسطة)

Website

https://kafalah.gov.sa

Company type

Private

Founded year

2001

Operating status

Operating

Headcount range

101–250 employees

Short description

Kafalah is the Saudi Arabian government's flagship SME financing guarantee program, issuing 80-95% credit guarantees through 69+ partner banks to micro, small, and medium enterprises that lack collateral, aligned with Vision 2030 SME growth targets.

Ownership category

akta.pro rank

Product category

SME Financing Guarantee Services

NAICS

Depository Credit Intermediation (5221)

SIC

Federal & Federally-Sponsored Credit Agencies (6111)

akta.pro primary industry

SBA/Government-Backed & Development Finance Loans (FSAKAGAI)

akta.pro secondary industry

Development Finance, Guarantees & Blended Finance Programs (BPADABAM)

Keywords

• SME financing guarantees
• Government credit guarantees
• Saudi SME lending
• Credit risk coverage
• Working capital guarantees

Headquarters

HQ city

Riyadh

HQ country

Saudi Arabia

HQ region

Middle East

Offices1 record

Markets served

GTM type

B2B

Offering type

Services

Cost components

Personnel, Operations, Technology or R&D, Marketing or Sales, Others

Revenue model

1. Annual Administrative Fees: Kafalah charges nominal annual administrative fees for studying financing guarantee applications and follow-up services. These fees are paid by the financing entity, not the SME borrower directly.
2. Government Developmental Funding: As a non-profit government developmental program, Kafalah is funded by government budgets and does not aim to generate profit.

Pricing tiers

Go-to-market motion1 record

Distribution channels4 records

Marketing channels6 records

Core offering

Kafalah is a Saudi government financing guarantee program that provides credit guarantees on loans made by banks and financing companies to micro, small, and medium enterprises, covering up to 80-95% of the financing value depending on the product. The program works through over 69 cooperating financing entities and the TamweelGate electronic portal, and also offers sector-specific guarantees for export, technology, tourism, culture, entertainment, and other strategic sectors aligned with Vision 2030.

Product overview

Kafalah is a government SME Financing Guarantee Program that offers a portfolio of financing guarantee products designed to help micro, small, and medium enterprises obtain necessary financing. The core offerings include the Kafalah Regular Product (general coverage for all sectors at 80%), Working Capital Product (90% coverage), and Start-Up Enterprises Product (for businesses under 3 years old). Sector-specific products provide specialized guarantees for Technology, Export, Consulting, Culture, Tourism, Entertainment, and Awqaf & Non-Profit sectors with coverage ratios of 90-95%. These products are delivered through the TamweelGate electronic financing portal and supported by the Moahel approval probability service. The program collaborates with over 69 financing entities including banks and finance companies.

Differentiator

Problem solved

Functional benefit

Brands

• Moahel: Probability of Approval evaluation initiative - a tool to assess likelihood of financing approval
• TamweelGate
• Nabaa Service

Products and services

• Kafalah Regular (Regular Kafalah Product) A general-purpose financing guarantee product serving all sectors and business activities not covered by other Kafalah initiatives, providing up to 80% coverage of the financing value to micro, small, and medium enterprises.
• Start-Up Enterprises (Start-Ups Product) A financing guarantee product designed for enterprises within their first 3 years of operation from commercial register issuance, supporting early-stage businesses through partner banks and financing companies.
• Working Capital (Working Capital Product) A financing guarantee product supporting SME working capital financing, with maximum guarantee values of up to SAR 2.5 million (Micro), SAR 5 million (Small), and SAR 15 million (Medium), and coverage of up to 90% of funding value.
• Export Sector (Export Sector Product) A sector-specific financing guarantee product for SMEs in the local and international export and import sectors, offering up to SAR 2.5/5/15 million coverage and up to 90% of financing value.
• Technology Sector (Technical Product) A financing guarantee product dedicated to IT and technical-sector SMEs, providing up to 90% coverage of the funding value.
• Consultant Sector (Consultant Sector Product) A sector-specific financing guarantee product providing coverage for SMEs in the local consulting sector across various consulting disciplines.
• Culture Sector (Cultural Product) A sector-specific financing guarantee product supporting SMEs in cultural sectors and their supporting sectors, classified according to the Cultural Development Fund.
• Entertainment Sector (Entertainment Product) A sector-specific financing guarantee product supporting SMEs in different entertainment sectors and their supporting sectors, classified by the General Entertainment Authority.
• Tourism Sector (Tourism Product) A sector-specific financing guarantee product supporting SMEs in different tourism sectors, classified by the Tourism Development Fund, with maximum warranty value up to SAR 15 million for medium enterprises.
• Awqaf & Non-Profit Sectors (Awqaf & Non-Profit Product) A sector-specific financing guarantee product supporting SMEs in Awqaf and non-profit sectors with maximum guarantee values up to SAR 5 million for micro/small enterprises and SAR 15 million for medium enterprises, with up to 95% coverage.
• TamweelGate Financing Portal An electronic platform supervised by the SME Bank that connects financiers from government and private sectors with SMEs seeking financing, enabling SMEs to choose suitable financing offers and manage the application cycle.
• Moahel (Probability of Approval) A digital initiative providing a probability-of-approval assessment for Kafalah financing applications, helping SMEs gauge their likelihood of obtaining a guarantee before applying.

Quantifiable outcome

• SMEs supported show 20% growth rate in employees 6 months after obtaining Kafalah-guaranteed financing; male Saudi employment increases 7%, female Saudi employment increases 9% after 1 year
• +4 more outcomes

Named customers10 records

Segments7 records

Ideal customer profiles2 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Feature3 records

Partnerships

26 partnerships are on record, tiered core and flagship.

• SIMAH - Saudi Credit Information Company (سمة)coreTechnology or Integration · 28 May 2023Agreement to develop credit behavior classification system for automated guarantee decision-making, risk prediction, and enhanced SME financing access through innovative value-added services
• General Authority of Awqaf (الهيئة العامة للأوقاف)coreStrategic or Co-development Partner · 21 December 2022Cooperation agreement to support and develop SMEs operating in the Awqaf and non-profit sector, enhance their financial sustainability and credit capabilities through financing guarantees
• Saudi Arabian Basic Industries Corporation (SABIC) (سابك)coreStrategic or Co-development Partner · 29 March 2022Cooperation agreement signed to facilitate financing for entrepreneurial projects and support SME sector through SABIC's 'Nasand' initiative launched January 2018
• Tourism Development Fund (صندوق التنمية السياحي)coreStrategic or Co-development Partner · 29 March 2022Cooperation agreement to support and develop SME establishments related to tourism activities and provide necessary needs for their development
• Cultural Development Fund (صندوق التنمية الثقافي)coreStrategic or Co-development Partner · 29 March 2022Cooperation agreement to stimulate target cultural sectors and supporting sectors, create sustainable investment opportunities, and develop the cultural sector
• General Entertainment Authority (الهيئة العامة للترفيه)coreStrategic or Co-development Partner · 29 March 2022Partnership to support entertainment sector SMEs through Kafalah guarantee products
• Ministry of Industry and Mineral Resources (وزارة الثروة والصناعة المعدنية)coreStrategic or Co-development Partner · 29 March 2022Cooperation to develop the mining sector, diversify national economy, and attract local and foreign investors
• King Saud University - Entrepreneurship Institute (جامعة الملك سعود)coreStrategic or Co-development Partner · 29 March 2022Partnership to develop a positive entrepreneurial environment and enable young Saudi entrepreneurs to obtain necessary financing through advance guarantees
• King Faisal University (جامعة الملك فيصل)coreStrategic or Co-development Partner · 29 March 2022Innovation centers partnership to develop entrepreneurial ecosystem and support SME financing access
• Al-Jouf University (جامعة الجوف)coreStrategic or Co-development Partner · 29 March 2022Innovation centers partnership to support entrepreneurial development in Northern regions
• Rukan Al-Amal Company (شركة ركن العمل)coreStrategic or Co-development Partner · 29 March 2022Business incubators and accelerators company partnering to support entrepreneurial ventures through Kafalah guarantees
• National Industrial Development and Logistics Services Program (ندلب)coreStrategic or Co-development Partner · 29 March 2022MoU to support and develop industrial and logistics sectors by providing necessary guarantees to financiers and increasing financing ratios
• Ministry of Municipal and Housing Affairs (وزارة الشؤون البلدية والقروية والإسكان)coreStrategic or Co-development Partner · 29 March 2022MoU to support and develop real estate developer sector and increase its contribution to GDP through enhanced financing
• Ministry of Sports (وزارة الرياضة)coreStrategic or Co-development Partner · 29 March 2022MoU to develop and enhance the sports sector within Vision 2030 transformation and support target sports sectors
• Saudi American Express (أمريكان اكسبريس السعودية)coreChannel Partner/ Reseller/ Distributor · 29 March 2022Cooperation agreement to support SME financing and services
• SME Bank (بنك المنشآت الصغيرة والمتوسطة)flagshipStrategic or Co-development Partner · 16 February 2021Strategic partnership with SME Bank established by Council of Ministers Decision No. 376. Kafalah aligns its identity with SME Bank strategy and National Development Fund. SME Bank supervises the TamweelGate financing portal
• National Commercial Bank (البنك الأهلي)coreChannel Partner/ Reseller/ DistributorMajor Saudi commercial bank partnering with Kafalah to provide SME financing guarantees
• Saudi French Bank (البنك الفرنسي السعودي)coreChannel Partner/ Reseller/ DistributorFrench-Saudi banking institution providing SME financing with Kafalah guarantees
• Riyadh Bank (بنك الرياض)coreChannel Partner/ Reseller/ DistributorMajor Riyadh-based bank offering SME financing with Kafalah guarantee support
• Al Rajhi Bank (مصرف الراجحي)coreChannel Partner/ Reseller/ DistributorLeading Islamic bank providing SME financing with Kafalah guarantee programs
• Alinma Bank (مصرف الإنماء)coreChannel Partner/ Reseller/ DistributorSaudi Islamic bank cooperating with Kafalah for SME financing guarantees
• Saudi British Bank (SABB) (البنك الأول ساب)coreChannel Partner/ Reseller/ DistributorBritish-Saudi bank providing SME financing through Kafalah guarantee programs
• Saudi Investment Bank (البنك السعودي للإستثمار)coreChannel Partner/ Reseller/ DistributorSaudi investment bank offering SME financing with Kafalah guarantees
• Saudi Finance Company (الشركة السعودية للتمويل)coreChannel Partner/ Reseller/ DistributorMajor Saudi financing company providing SME loans with Kafalah guarantees
• Saudi Arabian Oil Company (أرامكو السعودية)coreStrategic or Co-development PartnerStrategic partner providing support for SME protection during economic challenges through Kafalah programs
• Saudi Central Bank (SAMA) (البنك المركزي السعودي)flagshipStrategic or Co-development PartnerPartnership for Guaranteed Financing Program covering 95% of financing value. Extended until March 2023 to support SMEs during and after pandemic, providing 13.3 billion SAR in guarantees

Scale indicators11 records

Recent moves8 records

Expansion highlights6 records

Broad incumbents

• U.S. Small Business Administration (SBA): The U.S. federal agency that runs government-backed SME loan guarantee programs (e.g., 7(a), 504, SBA Express). It is the closest functional analog to Kafalah, providing partial credit guarantees via partner banks to address collateral gaps for SMEs.
• International Finance Corporation (IFC): World Bank Group member providing SME financing guarantees and advisory globally. Kafalah won the IFC SME Finance Forum "Best SME Funder" award for three consecutive years, signaling direct functional comparability in SME guarantee design and execution.
• European Investment Fund (EIF): EU-level institution providing SME credit guarantees and securitization across Europe through partner banks and funds. Comparable as a supranational guarantee platform, but with broader geographic scope than Kafalah.

Regional players

• UAE Khalifa Fund: UAE federal initiative providing financing and credit support to Emirati entrepreneurs and SMEs. Comparable to Kafalah in mandate (national SME development) and Gulf-region context, though it offers direct financing rather than pure guarantees.
• Egyptian Credit Guarantee Company (ECGC): Egyptian credit guarantee company supporting SME access to financing through partner banks, often cited alongside Kafalah within the Arab Guarantee Programs Network. Comparable in mandate and Arab-region context.
• Malaysia Credit Guarantee Corporation (CGC): Malaysian government-linked company providing credit guarantees to SMEs through partner financial institutions. Operates a comparable partner-bank guarantee model in an emerging-market context similar to Saudi Arabia.

Direct peers

• British Business Bank: UK government-backed economic development bank that provides loan guarantees and growth capital to SMEs through partner banks and alternative lenders. Comparable to Kafalah in mandate (addressing SME finance gap) and channel-partner GTM.
• Korea Credit Guarantee Fund (KODIT): South Korea's primary government-backed credit guarantee institution, providing credit guarantees and technology guarantees to SMEs and startups. Operates with similar coverage ratios and partner-bank distribution as Kafalah and is widely cited as a best-in-class peer.
• Saudi Industrial Development Fund (SIDF): Saudi government development finance institution historically managing Kafalah before 2021; provides loans and credit support to industrial SMEs. Directly comparable as a Saudi sovereign development finance institution serving similar segments.
• National Development Fund (Saudi Arabia): Saudi umbrella institution overseeing development banks including SME Bank and SIDF. Kafalah operates under SME Bank, which sits within NDF; comparable as the parent ecosystem coordinating sovereign development finance for SMEs.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat5 records

Key risks6 records

Key highlights7 records

Customer concentration

• LinkedInlinkedin.com/company/kafalah-sa
• Xx.com/Kafalah

Revenue estimate

Valuation estimate

Number of profiles

Profiles4 records

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Kafalah