A spate of recent platform launches in Saudi Arabia has hinted that the country is set to become the peer-to-peer lending capital of the Middle East.
Fintech solutions company JustCoded has noted a rise in enquiries coming from Saudi Arabia-based P2P start-ups, while a recently-created regulatory sandbox has been helping Saudi-based lenders to scale up.
This follows several years of research into the fintech lending market by Saudi authorities and regulators.
A 2017 white paper by the Saudi-based financial services firm Derayah identified a $300bn (£216bn) credit gap in the small- and medium-sized enterprise (SME) lending market in the Middle East.
Meanwhile, the growth of the fintech market has been named a key part of the financial sector development programme of Saudi Arabia’s Vision 2030 initiative.
By 2020, there were 60 active fintechs operating in Saudi Arabia, including 12 P2P lenders: Forus, Funding Souq, Sahlah, Tamam, Tayseer, Nayifat, Ta3meed, Maalem Financing, Tammwel, Sulfah, Raqamyah Platform, and Lendo.
Since then, several more names have joined the market, including UAE-based business lender Beehive, consumer lending platform Quara Finance, and micro-lender Zain.
Funding into the country’s P2P sector has also increased over the past few months. In February 2021, Raqamyah raised $2.3m in a Series A fundraising round, with investments coming from a mix of institutional and angel investors. The following month, Lendo announced a successful $7.2m Series A funding round led by Derayah Ventures.