SNG: Saudi SME lending reached $125bln in 2025, says report

By Zawya03:28 (UTC), 23 September 2026 Updated

By Staff Writer

Saudi Arabia has made significant progress in expanding access to SME finance, with outstanding SME credit reaching approximately SAR467.7 billion ($124.5 billion) at the end of 2025, representing approximately 33% year-on-year growth. Despite that expansion, says a new report.

SME lending accounted for only 11.3% of total bank lending, compared with the Vision 2030 target of 20%, the report by ZCG Arabia said.

ZCG Arabia’s latest insights paper, “Closing the Gap: Shariah-Compliant Private Credit and the Next Phase of SME Finance in Saudi Arabia,” examines the evolution of the Kingdom’s SME financing ecosystem and the potential for private credit to complement traditional bank financing as businesses develop increasingly sophisticated capital requirements.

Based on the difference between the current SME lending levels and the Vision 2030 objective, ZCG Arabia estimates a financing gap of more than SAR300 billion ($80 billion). The estimate is based on ZCG Arabia’s internal analysis and has not been independently verified.

Authored by James Zenni, Founder, President & CEO of ZCG, the insights paper examines how this financing gap increasingly reflects the needs of established, fundamentally strong businesses rather than solely companies unable to secure traditional financing.

As the Saudi economy continues to diversity and businesses grow, SMEs are seeking capital for expansion, acquisitions, capital expenditure, supply-chain investment and working capital optimisation. Private credit can complement the role of commercial banks by providing tailored financing solutions to high-quality businesses whose requirements may extend beyond conventional bank lending, broadening the range of capital solutions available across the SME market.

The paper also highlights the potential role of Shariah-compliant private credit at the intersection of two structural trends: continued demand for Shariah-compliant investment solutions and the limited supply of institutional-quality private credit.

Saudi Arabia is one of the world’s largest Islamic finance markets, with demand for institutional investment opportunities developing across institutional investors, family offices, and private wealth. ZCG Arabia’s direct financing platform was established to address the evolving needs of businesses operating in the Kingdom through Shariah-compliant financing solutions supported by ZCG’s global private credit expertise.

The strategy focuses on senior secured and asset-based structures, along with additional Shariah-compliant financing solutions tailored to the needs of high-quality Saudi SMEs, with an emphasis on disciplined underwriting, capital preservation, downside protection, and rigorous risk management.

“Saudi Arabia’s financing landscape is entering an important next phase as the private sector continues to expand and businesses develop increasingly sophisticated capital requirements,” said Zenni.

“Banks will remain fundamental to the Saudi economy, but there is a clear opportunity to broaden the financing ecosystem with additional sources of institutional capital. This is where Shariah-compliant private credit can play an important role in that evolution by providing flexible, senior secured financing to high-quality businesses while giving investors access to private market opportunities aligned with Islamic finance principles. The opportunity ahead is significant, and we are focused on building a platform that can contribute to the continued development of Saudi Arabia’s private capital markets.” - TradeArabia News Service