Saudi firms partner to boost SME involvement in supply chains

• MoU between Banque Saudi Fransi and Lamaa to create solutions
• Lamaa’s technology incentivises corporates to pay SME suppliers early
• Growing fintech and supporting SMEs are key planks of Vision 2030

Banque Saudi Fransi has formed a tie-up with Saudi Aramco-backed fintech firm Lamaa pledging to develop products and services to aid supply chain management and cut costs.

Under a memorandum of understanding signed on Wednesday, the two companies agreed to collaborate to develop, evaluate and launch “supply chain solutions” that will streamline the process for businesses of all sizes, and increase involvement of small and medium enterprises (SMEs) in the supply chain.

Banque Saudi Fransi is a corporate, private and retail bank, established in 1977 and headquartered in Riyadh. It is affiliated with France’s Crédit Agricole Corporate and Investment Bank.

Lamaa is backed by state-owned oil giant Saudi Aramco and private equity firm Raed Ventures, which invests in seed and early-stage startups in Saudi Arabia and the wider Middle East and North Africa (Mena) region. 

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It describes itself as the first Shariah-compliant supply chain finance platform in the region, whose payables software programme enables and incentivises large corporates to pay their SME suppliers early in exchange for a small discount. 

Where the company in question is unable to fund early payment, Lamaa connects them with a marketplace of selected banks, financial institutions and asset managers, thereby increasing the prospect of funding reaching SME suppliers. 

Lamaa’s technology is processing millions of invoices annually for some of the biggest companies worldwide, it said. 

The partnership “demonstrates Lamaa and Banque Saudi Fransi’s commitment to delivering tangible opportunities to drive SME growth in the region” the two companies said in a joint statement, in line with the kingdoms’ Vision 2030 economic growth plan. 

The initiative also feeds into Banque Saudi Fransi’s own objective of enabling greater financial inclusion and digitisation. It is expected to help enable enterprise companies to improve their margins and costs while supporting cashflow and growth of SMEs across the kingdom. 

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Ali Najim AlKhamis, head of trade and supply chain of Banque Saudi Fransi, said: “We endeavour to create synergy with fintech companies such as Lamaa, who are introducing innovative and forward-looking supply chain solutions for encompassing the full vertical of the business value chains in Saudi Arabia.

“This partnership showcases Banque Saudi Fransi’s commitment to pioneer and promote the latest technology trends in the financial services sector.”

Lamaa’s chief executive Sumeet Khutale added: “Together we are launching new products and services that will empower supply chain finance trade between enterprises and SMEs throughout the kingdom.”

Lamaa is headquartered in King Abdullah Financial District (KAFD) in Riyadh and has other offices in Jeddah and Dammam.

Banque Saudi Fransi has 84 branches and 563 ATMs across the kingdom, and around 45,000 points of sale – where you can use your debit card to make a purchase through the bank.

Across Saudi Arabia, other efforts are being made to improve supply chain efficiency and operation.

On the logistics side, the General Authority for Civil Aviation (GACA) unveiled plans last month to build a 3 million square metre integrated logistics zone in Riyadh, within the boundaries of King Khalid International Airport.

Apple has signed up to be one of the global anchor tenants of the proposed new zone, which is part of the kingdom’s plan to quadruple the amount of cargo processed through its airports by 2030, to 4.5 million tonnes.

However, this industrial zone is not targeting SMEs, according to GACA’s vice-president of strategy and business intelligence Mohammed Alkhuraisi.

It is aiming to lure the top 100 leading companies within the supply chain, from sectors including pharmaceuticals, consumer products, electronics, luxury and aerospace.