https://arab.news/mctbr
RIYADH: Debt-based crowdfunding platforms in Saudi Arabia have provided a total of SR11 billion ($2.93 billion) in financing since the activity was introduced in 2016, according to the Saudi Central Bank, known as SAMA.
SAMA said that 10 digital brokerage firms are licensed to operate in the Kingdom, connecting customers with financing providers based on their credit commitments and financial standing, while presenting available funding options through digital platforms.
Licensed financing firms
The central bank said the Saudi market currently has 75 licensed finance companies as of June 2026, including 12 firms engaged in debt crowdfunding activities.
Debt crowdfunding is one of the financing methods used by some institutions. It is a digital ecosystem that enables companies to obtain direct loans from a large pool of investors, whether individuals or institutions, through an intermediary electronic platform.
In return, the borrower commits to repaying the financed amount along with the agreed-upon financial return, without the need to resort to traditional financing institutions.
This form of financing provides businesses with access to funding sources that support their growth and expansion, particularly small and medium-sized enterprises. It also gives investors opportunities to participate in financing economic activities through licensed digital platforms.
As a result, it contributes to diversifying funding and investment sources while also fostering innovation in financial services.
Despite the development of the debt crowdfunding sector, global experts and regulatory bodies have consistently warned about its risks, stressing that the high returns offered by these platforms are matched by a high risk of losses.
Returns and risks
Financing mechanisms vary depending on the type of project. Some companies finance real estate projects or asset purchases, with investment periods ranging from one to two years, while others focus on short-term invoice financing, with maturities ranging from 50 days to one year.
On the returns side, yields range between 10 percent and 18 percent before fees, which average around 1 percent of the total invested amount. The return is determined based on the nature of the company, its credit rating and its risk profile. Company data indicate that default rates remain low, ranging between 1 percent and 1.5 percent.
However, default is classified under two conditions: first, when the borrower is unable to repay the outstanding amount following the enforcement of collateral; and second, when payment is overdue for more than 90 consecutive days, in accordance with the activity rules set by the Saudi Central Bank.
In this context, SAMA has implemented several initiatives that have contributed to the growth of financing provided to businesses in the Kingdom.
These include issuing and updating regulatory frameworks, licensing new financial institutions and emerging financing activities, facilitating easier access to banking services for businesses, and enhancing disclosure of financing data for micro, small and medium-sized enterprises.
Purpose of digital brokerage firms
Digital brokerage firms are licensed technology-based entities that connect individual and corporate customers with financing providers.
They operate through electronic platforms that allow customers to view, compare and select the most suitable financing offers based on their financial standing, without the need to approach each financing provider individually.
As part of its role in supporting the development and empowerment of the financing sector, SAMA has allowed the entry of ancillary financing activities to strengthen the sector and attract a new segment of investors and companies that add value.
This is done while ensuring the efficient operation of these firms through compliance with the regulatory and supervisory requirements issued by the central bank.