The Financial Bridge | Unpacking Saudi's SME Credit Access

📌 SME Lending Surges in Q1 2025

Lending to micro, small, and medium enterprises jumped 31% YoY, reaching SAR 383.2 billion ($102B) in Q1 2025

→ 95.12% of lending came from banks; 4.88% from finance companies.

📌 Micro-Enterprise Lending Leads Growth

Micro-enterprise credit posted the sharpest rise,82% YoY,in Q1 2025, while small firms grew 35%, and medium enterprises rose 18%. The mid-market still received the largest share at SAR 190.2B.

Much of this growth is tied to Kafalah guarantees, covering up to 80% of loan value.

📌 Fintech Lending Channels Expand

New-age platforms like Erad are unlocking credit at speed,raising $16M pre-Series A to scale Sharia-compliant, data-driven SME lending. Over 60% of borrowers are first-timers; loans are disbursed within 48 hours.

📌 SMEs Still Below Target Share of Total Credit

Despite progress, SME lending accounts for just over 9% of total bank lending,far from the 20% Vision 2030 goal. In contrast, real estate, infrastructure, and transport continue to attract dominant allocations.

📌 Nayla Finance Raises $4M to Deepen Micro-Enterprise Reach

Riyadh-based Nayla Finance secured $4 million in seed funding, led by Sanabil Venture Studio, to scale its micro-business lending platform. It plans to deploy SAR 2.7M in debt financing through e‑commerce, retail, and food & beverage partnerships, all powered by data‑driven underwriting.

📌 Sukna Capital Launches Shariah-Compliant Direct Lending Fund

Sukna Capital has unveiled Saudi Arabia’s first open‑ended, Shariah‑compliant direct lending fund, offering SMEs real‑time working capital access via integrated platforms without requiring equity dilution.

📌 SME Bank Rolls Out SAR 240M Crowdfunding Agency Model (Phase II)

Saudi’s SME Bank has launched the second phase of its agency model, partnering with crowdfunding platforms Manafa, Lendo, and Tameed to distribute SAR 240 million in MSME financing (2025 target). Loans range from SAR 50,000 to SAR 1 million, with up to 12-month terms and 3-month grace periods for select options.

📌 Fast Company ME Highlights Fintech Solutions to Saudi’s $80bn SME Credit Gap

Fast Company Middle East has spotlighted Saudi Arabia’s $80 billion SME financing gap, driven by collateral-heavy requirements, slow manual underwriting, and fragmented credit access. The article underscores the role of fintech innovation in closing this gap, featuring platforms like Abwab.ai that use AI-powered underwriting and alternative data to accelerate credit decisions for thin-file SMEs.

📌 Global SME Banking Evolves at Scale

The global SME banking sector is on track to reach a market size of $1.72 trillion in 2025. Digital-only banking adoption has surged,78% of SMEs worldwide now rely on these platforms. In North America, 92% of new SME bank accounts were opened digitally in 2024. Fintech partnerships now account for 35% of global SME loan originations, and the average loan approval time has dropped to just 2.6 days.

📌Embedded Finance Accelerates SME Access in Europe

Berlin-based embedded-lending provider Banxware raised €10 million from UniCredit in June 2025. The investment comes with a strategic partnership bridging digital ecosystems with a network of banks and non-bank lenders, aligning lending-as-a-service with BaaS platforms like Aion and Vodeno.

📌 UK’s Iwoca Delivers Ultra-Fast SMEs Loans

Iwoca, a UK fintech, issued £952 million in unsecured loans to over 100,000 SME businesses in 2024 alone. Backed by Barclays and Citi, it delivers loan approvals in as little as 20 seconds. The company posted £234 million in revenue and £59 million in pre-tax profits, marking a strong rebound.

📌 MENA Startup Funding Soars with SME-Focused Debt Capital

In H1 2025, startup funding across the MENA region surged to US $2.1 billion, a 134% increase YoY led by Saudi Arabia’s strong activity. Notably, debt financing accounted for 44%, underlining growing appetite for structured SME credit rounds. Fintech emerged as the most funded sector, attracting over US $930 million in capital.

📌 Craft Revival: Artisan Ceramics Cooperative | Eastern Province

In Saudi Arabia’s Eastern Province, a group of 12 women artisans launched a traditional ceramics cooperative in Dammam. Despite rich cultural roots, financing gaps held them back,banks considered them high risk due to lack of formal credit history and collateral.

Everything changed when the cooperative accessed SAR 1.2 million in microfinance via a new SAMA-backed microcredit program, tailored for craft and home-based businesses.

Within months:

• Production capacity expanded by 150%

• Artisan revenue increased by 60%

• Five market stalls in the Made in Saudi national artisan network were opened

• 30% of sales started coming from online direct-to-consumer channels

→ 📎 Cited in media coverage of Saudi’s expanding microfinance and SME support policies in 2025.

→ This is the kind of grassroots ambition Abwab.ai is built to accelerate through smarter, faster, AI-powered credit decisioning for entrepreneurs who’ve long been overlooked.

📌 FSDP Targets 11% SME Lending Ratio by 2025 

Under Vision 2030’s Financial Sector Development Program, Saudi aims to increase SME credit allocation to 11% of total bank lending, up from under 9%. Support comes from Monsha’at, SME Bank, Kafalah, and ecosystem-level financial education.

📌 CMA Licenses Razeen Financial for Investment Management 

Razeen Financial received CMA approval to conduct investment management activity, adding a new institutional player capable of facilitating SME-focused capital deployment and managed debt portfolios.

📌 CMA Prioritizes Rated Debt Instruments in IPO Reviews

The CMA will now expedite reviews for public offerings of credit-rated debt instruments, incentivizing issuers to meet higher transparency and governance standards.

📌 SAMA Expands Licensed Consumer Microfinance Providers

The Saudi Central Bank (SAMA) has licensed Awn Alraidah and Al-An AlKhaligia Company (Flooss) to operate as regulated consumer microfinance providers. Both will leverage digital and fintech channels to deliver accessible, small-ticket credit; particularly for lower-income, informal, and underserved segments.

📌 CMA Grants Fintech Permit to Sahem Financial

Sahem Financial received CMA sandbox approval to test SME-targeted debt instruments, part of a broader trend of regulatory experimentation with next-gen credit vehicles.

📌 The SME Credit Crunch in Saudi Arabia. Why Traditional Lending No Longer Works?

An exclusive deep dive from Abwab.ai into Saudi Arabia’s $170B+ SME financing gap — unpacking why conventional, collateral-heavy lending models fail to meet the needs of the Kingdom’s 1.3M+ SMEs, and how AI-powered underwriting is rewriting the rules.In this feature, we explore:

• The structural barriers keeping SME lending stuck below Vision 2030 targets

• Why “one-size-fits-all” credit policies leave viable businesses unfunded

• How fintech innovation, alternative data, and automation are bridging the gap

• The role of Abwab.ai’s credit intelligence platform in enabling smarter, faster, more inclusive lending

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→ Read in Arabic ›