National Fund to resume SME financing after COVID-19 hiatus

• The National Fund held several meetings with specialized bodies, including the Union of Investment Companies, to discuss the optimal methods, which will represent a new road map for the return of financing to entrepreneurs who own small and medium enterprises.

• The fund is studying a number of ideas, including crowdfunding for SMEs. This would involve presenting the project idea, which the initiator offers through private subscriptions.

• The National Fund has disbursed only 9-10% of its capital, around 180-200 million dinars, funding 1,040 projects in diverse commercial sectors.

Al-Qabas newspaper has learned that the National Fund for Small and Medium Enterprises Development is set to resume financing projects for Kuwaiti entrepreneurs soon, following a hiatus of nearly four and a half years caused by the COVID-19 pandemic and its impact on both local and international markets.

Informed sources confirmed to Al-Qabas newspaper that the financing mechanism will change radically from the previous one. The initiator will not be granted financing from the fund alone to be repaid through installments only, but rather there will be multiple options for granting financing to those who deserve it.

The sources pointed out that the National Fund held several meetings with specialized bodies, including the Union of Investment Companies, to discuss the optimal methods, which will represent a new road map for the return of financing to entrepreneurs who own small and medium enterprises.

The sources reported that the National Fund, in the coming period, will play the role of a market maker for business opportunities for young Kuwaiti entrepreneurs by linking them to the economic and financial complexes and various industries affiliated with the private sector, as well as facilitating the completion of their transactions and paperwork in government agencies, whether service or supervisory.

The sources explained that among the new financing options the National Fund is studying is the establishment of financial portfolios in partnership with banks, investment companies, and others. This way, the financing process is carried out through specific shares paid by the initiator (the project owner), the private investment institution, and the fund.

They also explained that the fund is studying a number of ideas, including crowdfunding for small and medium enterprises. This would involve presenting the project idea, which the initiator offers through private subscriptions, via a platform supported, approved, and licensed by the Capital Markets Authority. Project shares would then be offered after approving its feasibility study and determining its capital.

According to the National Fund law, projects accepted into the financing program are granted on the condition that the project capital does not exceed KD 500,000, the initiator is of Kuwaiti nationality and at least 21 years old, and he devotes himself full-time to project management.

New roadmap

The sources pointed out that the National Fund held a number of meetings with specialized bodies, including the Union of Investment Companies, to discuss the optimal methods that will represent a new road map for the return of financing to entrepreneurs who own small and medium enterprises.

The sources reported that the National Fund will, in the coming period, play the role of a market maker for business opportunities for young Kuwaiti entrepreneurs by linking them to economic, financial, and various industrial complexes affiliated with the private sector, as well as facilitating the completion of their transactions and paperwork with government agencies, whether service or regulatory.

The sources explained that among the new financing options being studied by the National Fund is the establishment of financial portfolios in partnership with banks, investment companies, and others. Thus, the financing process is carried out through specific shares paid by the entrepreneur who owns the project, the private investment institution, and the fund.

Sources explained that the fund is studying a number of ideas, including crowdfunding for small and medium enterprises. This would involve presenting the project idea submitted by the initiator through private subscriptions via a platform supported, approved, and licensed by the Capital Markets Authority. Project shares would then be offered after the feasibility study is approved and the capital is determined.

They continued, the return of the financing wheel to rotation came after the recent stability in the new executive management assigned to manage the fund’s affairs, including the acting director general and his deputies, who made great efforts to reorganize the National Fund internally. As a result, financing for initiators will return soon.

Quality projects in various activities

The sources said that the new projects to be accepted will be specific to various economic activities, focusing on projects that make a difference and add value in their respective sectors, and that provide job opportunities for Kuwaiti youth.

Only 10% of Fund’s capital has been utilized

The National Fund for the Care and Development of Small and Medium Enterprises has used only nine to ten percent of its capital so far for the loans provided to entrepreneurs, totaling between 180 and 200 million dinars. It has financed 1,040 projects across various commercial activities.