MSMEs OF SAUDI ARABIA: STATUS AND PROBLEMS

Abstract

Micro, small, and medium enterprises (MSMEs) are considered as the engine of growth in the developing economy.  MSMEs boost and accelerate the rate of growth of development of the economy and utilize the resources optimally and provide employment. In Saudi Arabia, the contribution of MSMEs is only 21% which is lower than the average of the advanced countries. Hence, there is a need to enhance the contribution of MSMEs in the GDP of Saudi Arabia to shift the economy from oil to other sectors. The objective of the study is to consider the current status and problems and challenges of the MSMEs of Saudi Arabia. The study considers the secondary data obtained from the General Authority for Statistics of Saudi Arabia and an extreme polar study conducted to identify the MSMEs’ economic activity-wise.  MSMEs of wholesale trade, manufacturing, and mining and quarrying are profitable more than the other sectors’. The employees of medium-size establishments of Professional, scientific and technical activities, and insurance and financial sector activities face the training need problems. The Saudi MSMEs face the problems of low demand for the products, unavailability of the required human resource, and access to finance. There is a need to establish a training institute by the government and provide an organized platform for the distribution of the products internationally. There should be a special financial assistance program should be launched after identifying the financial need and requirements of the MSMEs to enhance the contribution and attain the goals of vision 2030.