Financing backed by the Social Development Bank's guarantee
The Kafalah program (Social Development Bank) guarantees up to 80% of your commercial loan to the lender. This significantly reduces lender risk, boosting your approval odds — especially if your business is new or lacks sufficient collateral. Maximum guaranteed amount: SAR 10M.
10,000,000 (المكفول)
SAR max
Follows original lender terms (1-10 years)
Tenor
15 to 30 days (Kafalah review)
Speed
Kafalah fee 1-3% annually of guaranteed amount + lender APR
Cost
Apply for financing to a bank or finance company on the Kafalah network
If eligible, apply for a Kafalah guarantee (through the lender)
Kafalah evaluates your project and business (revenue, sector, plan)
Upon approval, Kafalah guarantees 80% of the amount to the lender; you get financing on better terms (lower APR)
Repay the lender normally; the guarantee only activates if you default
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Maximum amount
10,000,000 (المكفول) SAR
Tenor
Follows original lender terms (1-10 years)
Cost structure
Kafalah fee 1-3% annually of guaranteed amount + lender APR
Funding speed
15 to 30 days (Kafalah review)
Kafalah is Saudi Arabia's government program for guaranteeing SME loans. Founded in 2006 and administered by the Ministry of Finance, the program guarantees up to 80% of loan value (in some cases 90% for priority enterprises), reducing risk for the financing bank and opening financing to small companies that cannot provide full collateral.
Eligibility: a Saudi enterprise registered with the Ministry of Commerce, with sales below SAR 200M annually (for medium enterprises), fewer than 250 employees, and a valid CR. Eligible sectors: manufacturing, services, trade, agriculture, tourism, technology, and Vision 2030 priority sectors. Kafalah partner banks: Al Rajhi, SNB, Riyad, Alinma, Saudi Investment Bank, Bank Albilad, SABB, AlJazira.
Key notes: to maximize Kafalah's benefit, apply for a loan with a partner bank and explicitly request Kafalah guarantee. The guarantee isn't added to the loan cost directly, but banks use it to improve offered terms. Companies owned by Saudi entrepreneurs (Saudi nationals or qualifying residents with founding certificates) get priority. Processing takes 2-6 weeks after the bank approves the base loan. With the 2024 program expansion, Kafalah now covers new sectors including FinTech and the digital economy — and the 2024 maximum-coverage increase to 90% for women-led and youth-led enterprises has materially expanded the addressable applicant pool.
No. Kafalah doesn't lend directly — it guarantees loans from lenders (banks, finance companies). You get the financing from the approved entity; Kafalah reduces their risk via the guarantee.
Kafalah guarantees commercial loans from private lenders; it doesn't lend itself. SIDF lends directly from its own budget to factories at concessional rates. You can combine them: SIDF for major assets, Kafalah for additional commercial financing.
Kafalah fees (1-3% annually on guaranteed amount) add to lender APR, but savings on lender APR (due to reduced risk) usually offset and exceed the fee. Kafalah also unlocks financing that wouldn't be available without collateral. Net: positive for SMEs lacking collateral.
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