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SAUDI ARABIA - Finance

Abdulrahman M. Bin Mansour


Acting CEO, SME Bank

Bio

Abdulrahman bin Mansour is the acting CEO of Small and Medium Enterprises Bank (SME Bank), as well as chairman of the board of directors of the Financing Guarantee Program (Kafalah), member of the board of directors of Saudi Venture Capital Company SVC, an member of the Executive Committee Supervising the National Initiative (Nusaned-SABIC). He has extensive experience in the local market within sectors of investment, financing, and financial management during a career spanning more than 21 years. He holds an MBA in finance from the University of Manchester (UK) and has an executive finance education form both INSEAD (France) and London Business School (UK).

"Digitalization is a vital tool for us. SME Bank’s strategy goes beyond funding."
TBY talks to Abdulrahman M. Bin Mansour, Acting CEO of 
SME Bank, about supporting business, collaborating with government entities, and short-term goals.
Can you highlight SME bank’s milestones thus Far In terms of supporting The growth of SMEs In Saudi Arabia?

When I assumed my role in January, we looked at the strategy of SME bank and its three main pillars, or ABC, which stands for activate, build, and consolidate. We began with “Activate” soft launch of the bank’s products and activities, which took place in December 2022. In the meantime, in November, the government released a new bylaw that clearly defines SME bank as a digital bank. Subsequently, that helped with the second part of our strategy, “build,” which we focused more on this year 2023. In today’s world, it is impossible to establish offices everywhere, and the most logical step is to develop our digital capabilities and digital platform. Our “build” phase is divided into four pillars: pre-purchased efficiency systems; governance; integration and consolidation of our subsidiaries, namely Kafalah and Saudi Venture Capital company; and, lastly, business development. From day one, we made the decision to handle indirect lending and formed agreements with banks and NBFIS, companies, and Fintech and rely on their infrastructure, systems, and governance to lend on our behalf. We are currently still working on the “build” phase, implementing our initiatives in terms of efficiency and people, and building up our internal culture in addition to digital capabilities, governance, and consolidation. We are also working with our subsidiaries to develop our own internal culture, essentially defining the DNA of the company.

What are your strategies and Initiatives to enhance the Bank’s effectiveness in terms of supporting SMEs within the ecosystem?

Digitalization is a vital tool for us, SME bank’s strategy goes beyond funding. In Saudi Arabia today, data and information on SMEs are scattered and sit in different ministries and government agencies. The aim of SME bank is to work with the entire government, integrate all its different agencies, and consolidate all the data on SMEs. Through our digital platform, we aim to be the data hub for all SMEs. When the government develops strategies and decisions about the economy, we want to play a vital role via our data. That is our goal in terms of going beyond funding. We want to develop the sector and become the data aggregator of all SMEs across the kingdom. By understanding SMEs behavior, credit scores, backgrounds, and financials, we can subsequently design the best and most optimal lending products for them.

How does SME bank collaborate with other government entities to further support the SME ecosystem in Saudi Arabia?

SME bank is set to play an important role in the country in terms of improving local content. We have held discussions with SABIC and are also in advanced talks with Aramco and many other stakeholders. We also plan to approach PIF to outline our offerings and capabilities. This includes our website, where we have 50 lenders all aggregated, similar to a marketplace platform. We want SMEs and fintech to visit our website, where they have the option to choose between 50 lenders & compare offerings. In its first quarter alone, our lending amount reached 1.7 billion SAR. We can offer this funding gate to all government agents and the entire ecosystem. We can also offer six products that have been designed to suit SMEs’ needs. When talking to government entities, we also discuss our plans in terms of digital transformation & improvement, our digital strategy, and the future digital capabilities. We aim to create a positive disruption in the market and digitalize the entire lending process from A to Z. This means that when SMEs apply for a loan, we will handle the KYC and the credit scoring digitally. The final part, lending, will also be fully digitalized with minimal, or zero, human intervention, which is our eventual target. We are investing in our digital capabilities with this target in mind. Once we have the infrastructure in place, we can offer these capabilities to others as well, including government agencies. I would like to help to reinvent the wheel so we can do business in a different way. I would like to have everything that can help SMEs grow all on one platform.

What are SME Bank’s short-term goals?

Our immediate priorities are to complete our regional strategy, namely activate, build, and consolidate, and subsequently integrate with Kafalah and SVC. On top of that, we are focused on building up our partnership with international and local institutions. We are currently in discussions with technical institutions and banks to transfer our know-how to SMEs. Approximately 80% of SME issues have to do with funding; the rest is knowledge about growth. SMEs may not be well-versed in accounting, cash flow, calculating risk, and so on; however, SME Bank cannot do this alone. That is the reason why we focus on partnering with entities in the ecosystem to also provide financial support and educate SMEs. We are working on a closer alignment with others in the ecosystem.

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