Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA

Osama Mohammed Elhassan

doi:doi:10.11648/j.jfa.20190705.16

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Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA

Osama Mohammed Elhassan

Published in Journal of Finance and Accounting (Volume 7, Issue 5)

Received: 17 February 2019 Accepted: 17 September 2019 Published: 26 October 2019

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Abstract

The current study dealt with the obstacles and problems facing SMEs in the Kingdom of Saudi Arabia. The study followed the descriptive analytical approach and found that there are multiple problems facing these institutions, the most important of which are the lack of funding, availability and capacity of employees, weak demand, government regulations and regulations in addition to some obstacles represented in fees. Labor and workers system recruitment, Competition, employment of Saudis, issuance or renewal of licenses, bureaucracy, and government measures. One of the most important findings of this study is the possibility of developing this sector in the presence of the General Authority for Small and Medium Enterprises, which relied on the division of institutions into three types (micro, small and medium) according to labor standards and revenue size. Through these results, the study recommends that the Saudi Arabian Monetary Agency (the Central Bank of Saudi Arabia) should have an encouraging policy for financing SMEs with a unified definition and a specific percentage of financing ceilings to be financed, with a legal and legislative basis and a mechanism for the development of SMEs. And to consider the establishment of banks specialized in the financing of these institutions to play their role in accordance with the Kingdom's vision 2030.

Published in	Journal of Finance and Accounting (Volume 7, Issue 5)
DOI	10.11648/j.jfa.20190705.16
Page(s)	168-183
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Finance, Small and Medium Enterprises, Islamic Finance

References

[1]	Report of the International Labor Organization (2017).
[2]	Report of the United Nations Industrial Development Organization for Small Enterprises in Developing Countries (UNIDO), 2017.
[3]	Khalil and Nqmoush (2010) d. Abdel Razek Khalil A. Adel Nqmoush Role of small and medium industries in achieving economic development - University of A Laghouat - Algeria.
[4]	Islam Online (http://www.islamonline.net).
[5]	Annual Report of the Arab Labor Organization (2008).
[6]	The Journal of Human Sciences (www.ulum.nl http://) The importance of small and medium enterprises.
[7]	Omar (2009) Dr. Mohamed Abdel Halim Omar, Head of Sheikh Sale Kamel Center for Islamic Economics at Al-Azhar University "Islamic Financing Methods for Small Enterprises".
[8]	Al-Hiti (2009), Dr. Nawaf Abdulrahman Al-Hiti, "Small and Medium Industries in the GCC Countries, Current Status and Future Challenges".
[9]	Riyadh Chamber of Commerce and Industry (2004), a study within the activities of the Riyadh Economic Forum towards sustainable economic development entitled "Small enterprises are engines of economic growth".
[10]	C. L. Mann; Small and Midsize Enterprises in the United States and East Central Europe; Common Challenges in the 1990s, Oxford.
[11]	Salama (2009) Small projects in the Kingdom of Saudi Arabia and its role in reducing unemployment.
[12]	Al-Beltagy (2005), Dr. Mohamed El-Beltagy, Director of Sharia-compliant Banking Programs, Banking Institute, Saudi Arabian Monetary Agency (SAMA), "Proposed Formulas for Microfinance and Accounting Treatment of the Participation Formula".
[13]	the Annual Conference of the Arab Academy of Sciences Banking and Finance, Hashemite Kingdom of Jordan, Amman.
[14]	Ibrahim (2007) Dr. Badruddin Abdul Rahim Ibrahim, (Microfinance Requirements) Economist - Ministry of Finance Sultanate of Oman, Gulf Newspaper Miscellaneous series articles on microfinance and small and medium enterprises.
[15]	Yassin (2008), Mahmoud Mohammed Yassin, Journal of Urban Dialogue No. 2311 "Small production and share capital by reference to the situation of Sudan".
[16]	http://smeadvisorarabia.com.
[17]	Saudi General Organization for Statistics conducts an annual survey of small and medium enterprises 2017.
[18]	Vision of Saudi Arabia 2030.

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APA Style

Osama Mohammed Elhassan. (2019). Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA. Journal of Finance and Accounting, 7(5), 168-183. https://doi.org/10.11648/j.jfa.20190705.16

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ACS Style

Osama Mohammed Elhassan. Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA. J. Finance Account. 2019, 7(5), 168-183. doi: 10.11648/j.jfa.20190705.16

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AMA Style

Osama Mohammed Elhassan. Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA. J Finance Account. 2019;7(5):168-183. doi: 10.11648/j.jfa.20190705.16

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@article{10.11648/j.jfa.20190705.16,
  author = {Osama Mohammed Elhassan},
  title = {Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA},
  journal = {Journal of Finance and Accounting},
  volume = {7},
  number = {5},
  pages = {168-183},
  doi = {10.11648/j.jfa.20190705.16},
  url = {https://doi.org/10.11648/j.jfa.20190705.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20190705.16},
  abstract = {The current study dealt with the obstacles and problems facing SMEs in the Kingdom of Saudi Arabia. The study followed the descriptive analytical approach and found that there are multiple problems facing these institutions, the most important of which are the lack of funding, availability and capacity of employees, weak demand, government regulations and regulations in addition to some obstacles represented in fees. Labor and workers system recruitment, Competition, employment of Saudis, issuance or renewal of licenses, bureaucracy, and government measures. One of the most important findings of this study is the possibility of developing this sector in the presence of the General Authority for Small and Medium Enterprises, which relied on the division of institutions into three types (micro, small and medium) according to labor standards and revenue size. Through these results, the study recommends that the Saudi Arabian Monetary Agency (the Central Bank of Saudi Arabia) should have an encouraging policy for financing SMEs with a unified definition and a specific percentage of financing ceilings to be financed, with a legal and legislative basis and a mechanism for the development of SMEs. And to consider the establishment of banks specialized in the financing of these institutions to play their role in accordance with the Kingdom's vision 2030.},
 year = {2019}
}

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TY  - JOUR
T1  - Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA
AU  - Osama Mohammed Elhassan
Y1  - 2019/10/26
PY  - 2019
N1  - https://doi.org/10.11648/j.jfa.20190705.16
DO  - 10.11648/j.jfa.20190705.16
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EP  - 183
PB  - Science Publishing Group
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UR  - https://doi.org/10.11648/j.jfa.20190705.16
AB  - The current study dealt with the obstacles and problems facing SMEs in the Kingdom of Saudi Arabia. The study followed the descriptive analytical approach and found that there are multiple problems facing these institutions, the most important of which are the lack of funding, availability and capacity of employees, weak demand, government regulations and regulations in addition to some obstacles represented in fees. Labor and workers system recruitment, Competition, employment of Saudis, issuance or renewal of licenses, bureaucracy, and government measures. One of the most important findings of this study is the possibility of developing this sector in the presence of the General Authority for Small and Medium Enterprises, which relied on the division of institutions into three types (micro, small and medium) according to labor standards and revenue size. Through these results, the study recommends that the Saudi Arabian Monetary Agency (the Central Bank of Saudi Arabia) should have an encouraging policy for financing SMEs with a unified definition and a specific percentage of financing ceilings to be financed, with a legal and legislative basis and a mechanism for the development of SMEs. And to consider the establishment of banks specialized in the financing of these institutions to play their role in accordance with the Kingdom's vision 2030.
VL  - 7
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Author Information

Osama Mohammed Elhassan

Department of Businesses Administration, College of Sciences and Humanities, Majmaah University, AL, Majmaah, Saudia Arabia

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APA Style

Osama Mohammed Elhassan. (2019). Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA. Journal of Finance and Accounting, 7(5), 168-183. https://doi.org/10.11648/j.jfa.20190705.16

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ACS Style

Osama Mohammed Elhassan. Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA. J. Finance Account. 2019, 7(5), 168-183. doi: 10.11648/j.jfa.20190705.16

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AMA Style

Osama Mohammed Elhassan. Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA. J Finance Account. 2019;7(5):168-183. doi: 10.11648/j.jfa.20190705.16

Copy | Download

@article{10.11648/j.jfa.20190705.16,
  author = {Osama Mohammed Elhassan},
  title = {Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA},
  journal = {Journal of Finance and Accounting},
  volume = {7},
  number = {5},
  pages = {168-183},
  doi = {10.11648/j.jfa.20190705.16},
  url = {https://doi.org/10.11648/j.jfa.20190705.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20190705.16},
  abstract = {The current study dealt with the obstacles and problems facing SMEs in the Kingdom of Saudi Arabia. The study followed the descriptive analytical approach and found that there are multiple problems facing these institutions, the most important of which are the lack of funding, availability and capacity of employees, weak demand, government regulations and regulations in addition to some obstacles represented in fees. Labor and workers system recruitment, Competition, employment of Saudis, issuance or renewal of licenses, bureaucracy, and government measures. One of the most important findings of this study is the possibility of developing this sector in the presence of the General Authority for Small and Medium Enterprises, which relied on the division of institutions into three types (micro, small and medium) according to labor standards and revenue size. Through these results, the study recommends that the Saudi Arabian Monetary Agency (the Central Bank of Saudi Arabia) should have an encouraging policy for financing SMEs with a unified definition and a specific percentage of financing ceilings to be financed, with a legal and legislative basis and a mechanism for the development of SMEs. And to consider the establishment of banks specialized in the financing of these institutions to play their role in accordance with the Kingdom's vision 2030.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Obstacles and Problems Facing the Financing of Small and Medium Enterprises in KSA
AU  - Osama Mohammed Elhassan
Y1  - 2019/10/26
PY  - 2019
N1  - https://doi.org/10.11648/j.jfa.20190705.16
DO  - 10.11648/j.jfa.20190705.16
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 168
EP  - 183
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20190705.16
AB  - The current study dealt with the obstacles and problems facing SMEs in the Kingdom of Saudi Arabia. The study followed the descriptive analytical approach and found that there are multiple problems facing these institutions, the most important of which are the lack of funding, availability and capacity of employees, weak demand, government regulations and regulations in addition to some obstacles represented in fees. Labor and workers system recruitment, Competition, employment of Saudis, issuance or renewal of licenses, bureaucracy, and government measures. One of the most important findings of this study is the possibility of developing this sector in the presence of the General Authority for Small and Medium Enterprises, which relied on the division of institutions into three types (micro, small and medium) according to labor standards and revenue size. Through these results, the study recommends that the Saudi Arabian Monetary Agency (the Central Bank of Saudi Arabia) should have an encouraging policy for financing SMEs with a unified definition and a specific percentage of financing ceilings to be financed, with a legal and legislative basis and a mechanism for the development of SMEs. And to consider the establishment of banks specialized in the financing of these institutions to play their role in accordance with the Kingdom's vision 2030.
VL  - 7
IS  - 5
ER  -

Copy | Download