The Bahrain Development Bank (BDB), in partnership with a consortium of leading local and regional banks, has announced the launch of the kingdom’s first $265 million (BD100m) Private Credit SME Growth Fund.

The fund aims to accelerate economic development by providing critical financial support to small and medium-sized enterprises (SMEs), which constitute over 93 per cent of Bahrain’s companies. By empowering SMEs, the fund seeks to drive job creation, boost GDP, and enhance the overall resilience of the economy.

The Central Bank of Bahrain (CBB) is offering incentives to participating banks, allowing their funded portions to count towards their share of SME lending with a risk-weighted average of 25pc.

The fund’s capital is pooled from key local and regional financial institutions, demonstrating a strong commitment to Bahrain’s SME sector.

Managed by BDB with the support of Tamkeen, the fund was developed in collaboration with the Industry and Commerce Ministry, National Bank of Bahrain (NBB), Al Salam Bank, Bank of Bahrain and Kuwait (BBK), and Khaleeji Bank. It focuses on high-value sectors with significant export potential and job creation opportunities.

The fund has a 10-year fund structure, with a five-year deployment period dedicated to loan disbursements.

Industry and Commerce Minister Abdulla bin Adel Fakhro emphasised the government’s commitment to fostering a thriving private sector. He said: “By providing critical access to finance, we are empowering SMEs to expand, innovate, and contribute to Bahrain’s long-term economic growth.”

Dalal AlQais, chief executive of BDB, highlighted the fund’s strategic importance, adding: “This fund is more than just capital; it’s a tailored financial solution that will empower SMEs to drive Bahrain’s economic future.”

In line with Bahrain’s sustainability goals, up to 10pc of the fund will be allocated to support green economy initiatives.

The announcement was made during Gateway Gulf 2024, a high-level forum attended by government officials, business leaders, and investors from around the world.

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