KUWAIT, Feb 24 (KUNA) -- The recently approved bill to found Kuwait National Fund for Small and Medium Enterprises is a big step forward towards materializing His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah's vision to diversify Kuwait national economy and turn Kuwait into a commercial and finance hub, Kuwaiti officials and economic experts agreed.

"The National Fund for Small and Medium Enterprises will play an important role in expanding Kuwaiti youth contribution to the national economy and help create new cadres and future business leaders to develop the state economy," Director General of the state-owned Kuwait Small Project Development Company Hassan Mohammad Al-Qanaie said in an interview with KUNA.

"The SMEs help expand the state's production base and absorb national labor, bolster citizenry's saving and investment capabilities," he added.

Al-Qanaie, whose company offers finance to small and medium enterprises, disclosed that there is a growing demand for finance to small and medium enterprises in Kuwait.

"Our company has approved the establishment of 125 new enterprises during the period 2007-2012," he said, noting that 50.4 percent of the new enterprises belongs to Kuwaiti businesswomen.

"More other 41 enterprises at a total cost of KD seven million were financed by company in 2012." Meanwhile, Economy Professor at the Gulf University Hasan Al-Najar described SMEs as one of the main pillars of Kuwait's national economy.

"The objective of the National Fund for Small and Medium Enterprises is to help Kuwaiti youth have their own businesses," Al-Najar told KUNA, stressing that the Fund is a massive state investment in human resources.

"Youth, under the age of 21, make up 51 percent of Kuwait's population, so this initiative is a big step forward toward qualifying the young people and create more jobs for Kuwaiti people." Al-Najar urged the state to outline a clear strategy for the fund and to study and follow suits of the best practiced examples in this regard in the regional and whole world.

For his part, Director General of Kuwait-based Arab Planning Institute, Badr Othman Malallah commanded the initiative as a desperately needed move to diversify Kuwait's national economy and state income resources.

"The SMEs are also field for developing administrative, technical, marketing and productive skills of Kuwaiti youth in addition to increasing the private sector's share in national economy and lower unemployment rates," Malallah told KUNA.

Nabilah Al-Anjari, former assistant undersecretary of Kuwait Information Ministry for Travel Sector and chairperson of the Leaders Groups for Economic Consultancy, expected in an interview with KUNA that the fund will constitute a safety belt for national economy on the long run.

In the meantime, Amani Bourseli, former trade and industry minister and professor of finance and financial markets at Kuwait University, recommended a number of measures to render the initiative a real success.

"There is a need for founding a special entity for supporting SMEs and running the new fund. The state has to address the legislative problems obstructing the expansion of SMEs, diversify finance sources of the SMEs through offering commercial and Islamic finance institutions incentives and guarantees to finance small entrepreneurs," Bourseli told KUNA.

She underlined the importance of founding a research center to create a credible database and conduct studies on this sector as well as a training center to train and provide the new entrepreneurs with the required skills.

The Kuwaiti National Assembly (Parliament) unanimously approved on Wednesday the Financial and Economic Affairs committee report on the National Fund for Small and Medium Enterprises in its first and second readings.

The bill has been referred to the government for approval and implementation.

According to the law, a KD 2 billion capital is allocated for the fund to achieve the objectives of the Small and Medium Enterprises. The law also stipulates that the fund will finance a maximum of 80 percent of the enterprise and the applicant will bear the remaining 20 percent.

The law describes the Small and Medium Enterprises to include industrial, business, farming, handicraft, service, intellectual activities or any economic project which directly contributes to developing and diversifying the national income sources and meets the needs of local or foreign market as well as providing job opportunities to citizens and developing value of free work in them and the self-ability in any of the fields mentioned above.