Saudi Arabia Digital Lending Market to be Dominated by Personal Loan Segment During the Forecast Period

Surging demand for digital transactions, increasing demand from private sectors and easy availability of digital lending providers are expected to drive the growth of Saudi Arabia Digital Lending market.

According to TechSci Research report, “Saudi Arabia Digital Lending Market - Industry Size, Share, Trends, Competition, Forecast and Opportunities, 2018-2028F” The Saudi Arabia Digital Lending market is expected to grow during the forecast period owing to factors such as growing convenience of fintech companies, rising ease of availing loan, and growing demand from personal loan segment is driving the market growth.

In 2022, Saudi Arabia's consumer lending has  grown in both gross lending and outstanding balances, as the country appears to have largely recovered from the COVID-19 pandemic's effects. Consumer lending significantly increased in 2021 and maintained a positive trend, despite price increases and local and global inflation, well into 2022 due to consumer behavior and spending being directly impacted by the pandemic and the increase in VAT to 15%.

Furthermore, the FinTech Strategy Implementation Plan was introduced by the Financial Sector Development Program (FSDP) with the goal of positioning Saudi Arabia among the top nations in the FinTech industry and making Riyadh a hub for global FinTech. By 2025, the strategy wants there to be 230 FinTech businesses operating in the country, up from 82 today. Additionally, by 2025, it aims to reach a share of non-cash transactions (digital transactions) by 70%.

Following the publication of the PSP (Payment Service Regulations) regulations in January 2020, SAMA (Saudi Arabian Monetary Authority) will be tasked with licensing, controlling, and regulating the payments industry in the country. The purpose of this mandate is to establish an effective regulatory framework capable of fostering innovation in the financial technology and payments industries. It has borrowed many ideas from European PSP regulations, making it simpler for businesses to launch their services in the Kingdom if they have already received approval to operate in Europe. The effort was largely made to entice current foreign PSPs to operate in the country.

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Saudi Arabia digital lending market is segmented into loan type, tenure period, regional distribution, and competitive landscape. Based on loan type, the market is further divided into personal loan, business loan, auto loan, and others. Among these, the personal loan segment dominated the Saudi Arabia Digital Lending market with a significant share. Given that individual loans increased by 180% in 2022, from SAR 128.3 billion (USD 34.20 billion) to SAR 358.0 billion (USD 95.42 Billion), the retail sector has been the primary driver of this startling rise.

Leading market players operating in the Saudi Arabia Digital Lending Market are:

• Uniint
• Lendo Inc.
• Raqamyah Platform
• Tamwel Aloulah Company
• Foras Crowdfunding Company
• Platform Company Ltd Tameed Financing
• Abdul Latif Jameel IPR Company Limited
• Tamam
  

Numerous businesses developed the concept of creating their own online portals to easily and conveniently meet the needs of Saudi Arabian customers in order to meet the demand of the country's residents for digital lending. For instance, for its "Cash Jameel product," an Islamic Tawarruq that enables people to safely meet their financial needs by applying for a desired amount of cash and receiving an immediate initial approval, Abdul Latif Jameel Finance has announced the launch of a new mobile application. The financial product offered by Cash Jameel through a mobile application is one of the first of its kind in Saudi Arabia. It enables Saudi nationals earning more than 3,000 SAR (USD800) per month to easily apply for and receive an instant initial approval for a cash loan of at least 10,000 SAR (roughly USD2,667) and up to 20,000 SAR (roughly USD5,333).

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In term of regional share, the Eastern region is expected to dominate the market during the forecast period, the country’s Vision 2030 states that the eastern province is rapidly urbanizing, industrializing, and developing its infrastructure. The Central Awamiyah project, which aims to establish a tourist destination as well as a civil, cultural, and artistic center, was recently unveiled by Prince Saud Bin Naif, the emir of the Eastern Province. It is anticipated that this initiative will increase local demand for digital lending as various business loans are growing their focus toward availing loan through digital lending offered by online platform.

Government investment in construction activities, growing support of SAMA for Fintech companies, and the growing usage of internet are the certain influential factors for the growth of digital lending market in Saudi Arabia. Furthermore, the presence of online platforms is expected to support the market's growth given that 95.7% of the country’s population has access to the internet.” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm”.

“Saudi Arabia Digital Lending Market by Loan Type (Personal Loan, Business Loan, Auto Loan, Others), By Tenure Period (Less than 5 Years, More Than 5 Years), By Region, Competition Forecast & Opportunities, 2028” has analyzed the future growth potential of Saudi Arabia digital lending market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and assist decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with significant drivers, challenges, and opportunities in Saudi Arabia digital lending market.

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