Saudi announces ‘Fund of Funds’ to help small businesses
RIYADH - Saudi Arabia's Public Investment Fund on Monday announced a new investment arm to provide financing for small l and medium-sized enterprises, the state-owned PIF said in a statement.
The four-billion-riyal ($1.1-billion) "Fund of Funds" will invest in venture capital and private equity targeting SMEs, the statement said.
The fund is part of "Vision 2030", a broad programme of reforms launched by Crown Prince Mohammed bin Salman last year and aimed at diversifying the kingdom's oil-dependent economy.
The new fund is slated to contribute about 8.6 billion riyals to the country's gross domestic product and create 58,000 new jobs within a decade, the statement said.
Saudi Arabia has lost more than half of its oil revenues because of the slump in crude prices that started in mid-2014.
It has posted budget deficits over the past three fiscal years and is headed for another year in the red in 2017.
To counter sustained low oil prices, Riyadh has increased fuel and power costs, raised excise tax on tobacco and energy and soft drinks and is preparing to impose five-percent value-added tax (VAT) in 2018.
The world's top oil exporter is also battling a high unemployment rate of 12.8 percent among its citizens, a majority of them women.