To facilitate the expansion of the private sector's role in the national economy, the government has established five specialized credit institutions, which provide economic opportunities to many Saudis who were previously unable to compete in the marketplace. The Kingdom's financial institutions have provided a sum of around 70 billion U.S. dollars to citizens for development projects in agriculture, industry and construction.

In 1974, the Saudi Industrial Development Fund (SIDF) was the first government agency set up to provide interest-free soft loans to enable Saudi businessmen to establish industrial plants. These loans can be used to finance up to 50 percent of the capital for a new factory. SIDF loans have helped launch thousands of new factories and expand hundreds of existing facilities.

Since it was founded in 1963, the Saudi Agricultural Bank has provided close to 8 billion U.S. dollars worth of loans for agricultural projects, farm machinery and production requirements. The Real Estate Development Fund has been financing residential and commercial construction since 1974. Unique in the world, the fund provides interest-free loans that are repayable in 25 years.

Launched in 1971, the Public Investment Fund offers credit to public and semi-public corporations. The Saudi Credit Bank was founded in 1973 to provide personal loans for home repair, as well as vocational and crafts training. In addition to the specialized credit institutions, the government offers an array of incentives to the private sector. A sweeping reduction in utility and public service fees, implemented in early 1992, lowered operating and production costs for private companies, making their products more competitive with foreign goods.

Private entrepreneurs are also given access to government information systems specifically created to help local manufacturers target the best market for their products. Government agencies such as the Saudi Consulting House, replaced in April 2000 by the broader Saudi Arabian General Investment Authority (SAGIA), provide free consulting and support services and publish lists of investment opportunities for the production of goods in demand in Saudi Arabia. In September 2000 SAGIA opened service centers in Jeddah and Dammam in addition to its headquarters in Riyadh.

Government tenders also give priority to locally manufactured products and to Saudi companies. Saudi industries are also exempted from paying customs duties on the import of machinery and supplies used in the production of goods domestically.

To facilitate the transfer of technology and expand the operations of the private sector, the government also provides various incentives to foreign companies that enter into joint ventures with Saudi firms. Far-reaching new investment regulations in 2000, including removal of the need for sponsorship, gave further encouragement to foreign investors.