National Fund for SME Development — Kuwait's KD 2 Billion Lender and Its Slow Start

Kuwait established the National Fund for SME Development in April 2013 as an independent public corporation with authorised capital of KD 2 billion (roughly US$6.5–7 billion), created to combat youth unemployment and diversify the oil-dependent economy by financing small and medium enterprises directly.

The Fund offered loans of up to KD 500,000 per project at a subsidised 2% interest rate, covering up to 80% of a project's capital needs, targeting businesses employing between 1 and 50 Kuwaiti nationals. After a nearly four-and-a-half-year pause during the COVID-19 pandemic, lending resumed, but by 2025 the Fund had financed only around 1,040 projects in total after 13 years of operation.

Citing practical experience that "has not always translated into strong, productive entrepreneurship or sustainable business growth," Kuwaiti authorities began a major restructuring in 2025, shifting the Fund away from direct lending toward an indirect model that channels financing through partner banks and financial institutions. The case illustrates a common risk in large, centrally administered SME funds: capital availability alone does not guarantee take-up or impact, and slow disbursement can persist for over a decade before triggering redesign.

Read the full analysis: https://timeskuwait.com/kuwait-set-for-major-overhaul-of-small-projects-fund-to-boost-sme-growth/