Almajdouie: Supporting SMEs is an option for commercial banks to maintain their profitability
The founding partner of Raed Investment Company called on businessman Omar Almajdouie to all local commercial banks to raise the level of financial support for SMEs in the Kingdom, and not to confine themselves to large companies, stressing that the SMEs sector is witnessing successive developments, and banks should support them if they want to maintain their profitability.
This came during the direct meeting organized by Asharqia Chamber represented by the Eastern Businessmen's Council under the title "Cash Liquidity for SMEs under the Crises" as he praised the step of one of these banks that began to allocate 30% of his investment portfolio to finance SMEs.
He pointed out that the Coronavirus crisis has contributed to creating complete paralysis of some sectors such as aviation and tourism, while some economic sectors have entered into a semi-paralysis stage such as restaurants and ready-made clothes, while they have contributed to the revitalization of some sectors such as health, medicine, and logistics sectors, as well as the technology sector that has registered growth Significantly, he expressed his hope that the markets will gradually return to their previous level within the next few months.
Almajdouie called on companies to find a suitable mechanism to reduce expenses by maintaining the level of liquidity as well as reducing costs, especially in light of the current conditions, warning at the same time of the option to lay off employees, especially as companies will face difficulty in obtaining employment with the end of the crisis, calling for the need to put 6-month plan to meet the current difficult conditions.
He also stressed the importance of SMEs to switch to e-shopping, to cheapen its cost compared to traditional methods, as well as their opportunities to grow more in the coming period, estimating the size of e-shopping growth by about 15% globally.
He suggested that innovative companies despite their importance but may be subject to failure, and the proportion of risk with high, with an estimated projects globally failed by about 85%, while not successful projects 10% - 15% exceed approximately, which explains the reluctance of funding agencies to provide loans, And he cautioned against resorting to borrowing at the beginning of any new project in the near future and looking for other methods of financing such as partnerships, which reduce losses, especially if the partner is suitable, as an added value.
On the logistical sector, he said that it is one of the sectors that can grow in the future, as it is one of the most receptive sectors of technology, especially in the field of delivery, which was estimated last year at 200 thousand - 300 thousand daily requests in the Kingdom during 2019 while witnessing a high level of growth during the crisis is the best actual option.