"Monsha'at" and "Social Development" review the financing of franchise projects for entrepreneurs
Asharqia Chamber, represented by the Youth Business Council, organized the Pioneers Dialogue Program entitled "Financing Franchise Projects", which hosted officials from the Public Authority for Enterprises "Monsha'at" and the Social Development Bank.
Waleed Al Humaid, the consultant in Monshaat, explained that one of the most prominent tasks of the Commercial Franchise Center is to set the necessary conditions for practicing mediation and conciliation activities in the commercial franchise and to work on identifying the obstacles facing these activities, discussing them and developing appropriate solutions to them. Preparing studies, pamphlets, and research, organizing events related to commercial franchises, educating its practitioners, and supporting them with various forms of support.
Al Humaid added during the program, which was managed by Council member Ibrahim Al-Suhaibani, that the support takes several tracks, including improving the system, awareness-raising, education, capacity-building, and facilitating financial financing, and the authority has undertaken several initiatives for these tracks. He affirmed the Authority's keenness - through the Center of Excellence - to increase the number of awarding marks in the Saudi market, and to expand the scope of these marks locally to be able to grant franchises locally, regionally, and globally, and to work on diversifying the awarding marks to include priority sectors and increase their units, and thus increase investment opportunities for entrepreneurs As franchisees, and this requires an increase in the amount of funding available to entrepreneurs and franchisees. In this regard, he reviewed several services and programs provided by the Center that support the process of achieving these goals.
Accordingly, Al Humaid said that the growth rates of brands have witnessed remarkable increases during the period (2016-2020) at a rate of 73%, as their number was in the range of 400 brands (20 local brands and 380 foreign brands) in 2016 to jump to 692 brands (93 local marks, and 599 foreign marks). Pointing to the qualitative leap witnessed by Saudi brands, which rose from 20 to 93, at a rate of 365 percent during the four mentioned years.
He mentioned that the food and beverage, retail, services, and entertainment sectors are the most prominent sectors that have attracted brand activity, with rates (35%, 53%, and 12%), respectively.
For his part, the Franchise Finance Specialist at the Social Development Bank, Abdul-Malik Al-Saqiya, said that one of the bank’s main pillars is to provide value-added support to micro and small enterprises, by providing financing solutions and products, in addition to non-financial services, pointing to the franchise product - which is among one of the Financing services in the bank - which is defined as a financing product provided to entrepreneurs wishing to obtain a commercial franchise for local or foreign brands, the investment cost of which does not exceed 8 million riyals, and the volume of financing does not exceed 4 million riyals, and the guarantee percentage is determined by the bank, provided that it is not less than 50 % of the financing amount.
The product aims to provide financing to individuals wishing to do business with less risk by directing the franchising company, enabling granting companies faster and with administrative ability to follow up and quality after spread, raising the level of efficiency and spreading the services provided more, and contributing to economic development and raising the domestic product.
