The most prominent challenges are the high cost of capital as a result of high interest rates compared to large enterprises (LEs), the difficulty of obtaining proper finance due to shortage of guarantees and modest credit record, inability to compete and affect the market’s powers and making advantage of economies of scale as is the case with LEs, weak capacity to face and facilitate governmental procedures to expand their work, and low spending on development research works. Dear audience, Business enterprises in the Kingdom of Saudi Arabia have witnessed notable growth over the last years. The enterprises subscribing to the Social Insurance system have increased from 121.5 thousand in 1426AH to 218.4 thousand in 1430AH, with an average annual growth of 16 percent. Individual enterprises represent 93.1 percent, limited partnership enterprises 4.7 percent, and joint enterprises 0.6 percent of the total number. These enterprises’ economic activity is concentrated in three areas, namely, commerce with 34.3 percent, construction and building with 32.3 percent, and manufacturing industries with 14.6 percent. Small enterprises employing less than five persons have accounted for the bulk share, representing 45.5 percent of total enterprises at the end of 1430AH, enterprises with  2  BIS Review 171/2010  5–59 employees constitute 42 percent, while the remaining 3.8 percent has been accounted for by enterprises with more than 60 employees. These data show that most enterprises in Saudi Arabia are small ones, based on the number of employees. The SME’s contribution to total GDP is low.

Important progress is also being made at the operational and business levels. The most notable example mentioned by many today is T2S, a project with huge potential for market integration. T2S will enable the participating CSDs to focus on value-added services while the basic settlement service is provided via the single T2S platform. T2S will thereby make it easier for business to move from one CSD to another. The actors that harmonise in T2S have a greater chance of reaping the full benefits of T2S and widening their business. Conversely, the European CSDs that do not harmonise may see the securities issued via their CSD being settled predominantly in another CSD participating in T2S. An area of opportunities mentioned several times by speakers today is collateral management. Some of the regulatory initiatives I mentioned before, aiming to enhance safety in financial markets, are generating greater demand for high-quality collateral. At the same time, the crisis is making this collateral scarcer: there has been a shift from unsecured to secured funding and greater recourse to central bank liquidity. The increased demand for collateral is prompting market participants as well as the Eurosystem to develop innovative ways to make better use of existing collateral, i.e. to make assets more easily available, when and where they are needed. Harmonisation in this area is crucial to facilitate the efficient mobilisation of collateral across Europe. Examples are the auto-collateralisation functionality that will be offered by the T2S platform and the several initiatives underway to establish tri-party settlement interoperability.