Questions/Answers

"Tamkeen" Initiative The aim of this initiative is to support the most vulnerable groups. This initiative is designed to address the following challenges: • Poor participation of productive families in the Saudi economy. • Inability of the valuranable groups & low-income segment to integrate in the society. • Lack of efficiency in the non-profit sector and weak contribution to the economy. • Unemployment in Saudi society, and Saudi women in particular. Several factors contributed to the success of this initiative, including: Vision of Saudi Arabia 2030 where the vision focused on creating a vibrant society, a thriving economy and an ambitious nation. the targeted segments have been defined by using the below techniques : • Identification of the most-needy categories/segments using different measures ,including but not limited to , field research’s, questionnaires, social security agency data , available research in the market , international benchmark , and electronic integration with many other government agencies e.g. pension agencies .

The main objectives of the Bank's initiative are as follows: 1. Empowering the most needy segments, especially those benefiting from social security services, and supporting their transformation to start their income-generating projects. 2 - Provide financial support to microfinance associations and intermediary institutions to support the families and transform toward productive activities. 3. Encouraging economic activity in less developed regions. 4 - Building participatory and cooperative relations with the private sector and the government sector to serve the segment of the most needy segment and the lowest income.

This initiative is linked to the eighth objective of sustainable development of the United Nations 2030, entitled: Promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. This is done by promoting development-oriented policies that support productive activities, decent work opportunities, entrepreneurship, creativity and innovation, and promote the formalization and growth of micro, small and medium-sized enterprises, including access to Financial and non-financial services .

The Bank's initiative focuses on the same objectives of the UN initiative: • Promote development-oriented policies that support productive activities. The Bank is involved in the formulation of such policies with other official bodies, particularly activities that foster productive activities, including the adoption of self-employment policies including productive households, financing and support policies for start-ups and SME in cooperation with policy makers, including the Small and Medium Enterprises Authority, the Saudi Monetary Agency and others. • Decent employment opportunities: By income generating loans that been supported ,e.g taxi loans, the startups loan , as well as supporting productive families in which the bank channeled over $1.6 Billion • Entrepreneurship: The Bank provides opportunities for young people and young women to start their own businesses by lending up to 4 million Saudi riyals with a relaxed & flexible payback installments up to 10 years. • Creativity and Innovation: By providing a special track for creative and distinct projects across the path of invention, providing financial and non-financial support to them. • Encouraging the formalization and growth of micro, SMEs, including through access to financial services. In this regard, the Bank has signed several agreements to promote these projects and steer the support toward it.

The initiative aims to provide services to four (4) types of community members: • Families receiving social security: they are often the most needy (vulnerable) groups, • People in remote areas: The bank is supporting renovation loans to help the benefices to maintain their own home and limit the migration toward the big cities. • Women: the bank is designed and supporting several inclusive & diversified service and programs for women’s, and the vision of the Kingdom of 2030 has set ambitious goals for the empowerment of women in the labor market and others aspect of life. • Youth: this segment is supported through several programs of the bank e.g marriage loans in which the bank channeled over $ 12 billion since inception, education loans and scholarships in which the bank supported over 42,000 individuals to get a place in universities, all Startup track in the income generating loans.

This initiative has touched more than 7.7 million citizens across Saudi Arabia since the inception and has provided more than 70,000 new jobs to those engaged in microfinance activities, and productive families and SME. This initiative has contributed to the creation of educational opportunities for the country's citizens from the most needy sector, especially in remote areas, benefiting more than 42 thousand students who obtained the diploma and bachelor degrees. In addition to practical training courses, professional and professional for more than 73 thousand citizens and citizens of the most needy segment. The initiative also seeks to promote the most needy groups from pastoral to development and achieve financial sustainability through the empowerment of more than 31 NGOs in the Kingdom with a capital of more than $ 266 million .

Prior to this initiative, the activity of productive families was lacking to formal recognition and care, with the absence of official licenses to practice it, as well as the difficulty of doing business and opening small activities, and the absence of financiers who accept dealing with high risk projects. This initiative has brought innovative and new solutions to several categories including: • Empower productive families in their areas of presence and environments. • Empower young people to self-employ themselves and give them access to start-up financing. • Enable the most needy groups to receive assistance without embarrassment or humiliation . • Maintaining the stability of society by supporting women and equipping them with labor market skills such as training, education and others.

In fact, this initiative came in line with Saudi Arabia's drive to improve the quality of life of its citizens and raise welfare and meets the Saudi Arabia's vision of 2030. This optimism has helped the success of the initiative In 2017, the Bank financed more than 83,000 interest free loans with amount of $ 1.28 billion, which had a significant economic and social impact.

The Bank has used many resources to finance this initiative as follows: Financial Resources: The total capital of the Bank is $ 12 billion, which is recycled to support projects and loans needed by the community, including the most needy. Human Resources: The Bank has 1488 employees throughout the Kingdom. Branches: The Bank has 30 branches in the Kingdom. Partnership : More than 31 charities have been supported in all regions of the Kingdom in order to benefit from their geographical reach, access to the most needy groups and their knowledge of their living conditions.

No

Providing the interest free loans for microenterprises and productive families through charities and non-profit organizations while preserving the sustainability of these associations and non-profit organizations is one of the unique experiences in the world and the bank have channeled over $ 0.5 billion to the targeted segment in such style. Some parts of this initiative can be transferred to other regions or countries, especially the Arab region, such as: • Support security families by providing training, education and scholarships for their children and daughters, enabling them to carry out their families later and achieve social stability. • Support women and enable them to rely on themselves and equip them to the labor market properly.

During the construction of this initiative, sustainability has been taken into account in the following areas: • Social sustainability: The social impact of this initiative maximizes the stability of the family and society by supporting individuals and not leaving them alone in the face of social challenges. This is crystalized through the bank family’s loans to the most needy segment (prisoners family, divorced women etc) , which often do not find sufficient support from society for several reasons. Such an initiative covers this shortfall and increases the social impact of society. • Economic Sustainability: Since the initiative focuses on the transformation of beneficiaries from pastoral to development, the economic impact is significant and positive for the community, as individuals have received support from this initiative and established very successful commercial projects with a current market value of 90 times the loan they received. • Environmental sustainability: This is taken into account in all the projects provided by the bank. Environmental sustainability is achieved in the quality of the projects and their observance of the requirements of environmental preservation by complying with all the treaties and conventions that call for preserving the environment.

This initiative has been built to give more values as time progresses. The most vulnerable groups benefit from this initiative through the following stages: * Obtain an urgent loan without interest to meet urgent needs, often for the purposes of marriage, house renovation, supporting families of prisoners, widows or orphans. * Families are supported by providing good training and education to cope with the costs of life. * Families who are able to work from home can then be supported by providing an easy loan that generates a small income. * Families that make a profit from home can apply for funding to start a real business. * SME loans that channeled to enterpuner and self-starter people.

Yes

This initiative is periodically evaluated by the Ministry of Labor and Social Development where evaluation criteria are as follows: * Are the most needed categories serviced properly? * Number of beneficiaries of this initiative on an annual basis. * Amounts spent on this initiative on an annual basis. * Mechanism of action of the initiative, and the challenges it faces. An annual report is submitted to the Ministry with all this information, and the Ministry reviews to improve the quality of the initiative in line with the vision of the 2030 .

This initiative has touched more than 7.7 million citizens across Saudi Arabia since the inception and has provided more than 70,000 new jobs to those engaged in microfinance activities, and productive families and SME. This initiative has contributed to the creation of educational opportunities for the country's citizens from the most needy sector, especially in remote areas, benefiting more than 42 thousand students who obtained the diploma and bachelor degrees. In addition to practical training courses, professional and professional for more than 73 thousand citizens and citizens of the most needy segment. The initiative also seeks to promote the most needy groups from pastoral to development and achieve financial sustainability through the empowerment of more than 31 NGOs in the Kingdom with a capital of more than $ 266 million.

The main indicators of this initiative are: 1- Sustainability of small and micro-operational projects 2- The rate of improvement of the livelihood of the subsidized families 3. Ability of the supported families to obtain basic necessities (treatment and education) 4 - Percentage of married people who obtain loans from the bank with low income. 5- The percentage of geographical coverage and the spread of NGOs.

Several Governmental & non-governmental stakeholders were contributed to this initiative, including but not limited to : * Social Development Bank: The Bank plays a primary role in the management of this initiative. The Bank also, established several entities within it, such as: Dulani Business center for providing non-financial support, Social Charity Fund for Education, Training and Financial Assistance. * Charitable associations (NGO): It is a partner of the bank in delivering the services of the bank to the groups most in need to know their living conditions. * Ministry of Labor and Social Development: It plays the role as assessor and evaluator for the initiative.

1. it is proven that , the possibility of supporting micro-enterprises and productive families without interest to ease the burden on this vaurnalbe segment. 2 - the necessity for comprehensive solutions provided to include financial and non-financial support, such as (education, training, guidance and awareness etc.). 3. Partnerships are very helpful in increasing access to multiple and diverse segments that could not be accessed in traditional ways.