The Rise of Corporate Lending and Digital Credit in Saudi Arabia
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expert human analysis powered by advanced data tools.
The main observation of our analysis of the consumer loan sector in this week’s newsletter is that the share of consumer loans in total bank lending has steadily declined, which reflects a clear structural shift in the lending landscape in the kingdom.
It actually reflects the rapid expansion of corporate lending, which now dominates the sector as banks increasingly finance Vision 2030 projects, real estate, and business activities.
This shift underscores the Kingdom’s transition from a consumption-driven to an investment-and development-led financial system, supporting broader economic diversification goals.
The immediate impact of the expansion of consumer loans by fintech companies and Non-Banking Financial Companies is visible in the robust retail and e-commerce activity.
With 71% of the population under 35, demand for flexible, digital-first credit products is surging – also supported by government’s push for financial inclusion and digital payments (Over 75% of financial transactions are now digital).
The Saudi Arabian Monetary Authority’s regulatory sandbox is fostering new entrants and business models, while open banking which allows third-party providers to access consumer banking data securely, with the customer's consent, as well as the alternative credit scoring mainly using Artificial Intelligence are broadening financial inclusion in society.
This testing environment provided by the SAMA sandbox enables fintech startups and other innovators to experiment with innovative financial such as blockchain applications within a safe space that mitigates risks for consumers and the financial system.
However, this dynamic environment presents unique challenges for lenders, regulators, and consumers alike, requiring careful consideration to maintain stability and trust within this financial ecosystem.
This thriving sector is largely an unsecured lending sector, since it is not backed by any collateral or asset.
While non-performing loan (NPL) rates are still low in the kingdom at around 1.3%, however, if unsecured lending continues to increase faster than people's income growth, it could lead to excessive borrowing, increasing the risk of loan defaults and overleveraging. Today, the household debt-to-GDP ratio is at a record of 34.4%.
According to a recent survey published in the Saudi press, approximately 38% of Saudis have basic understanding of financial concepts. This means that majority lacks this essential knowledge, which could affect their ability to manage debt, savings, and investments effectively.
Another risk factor is the strong competition from the surge of fintech companies in the kingdom. This could fragment the market and raise concerns about asset quality; namely, the loans and investments held by these financial institutions, if underwriting standards are relaxed since such loans are normally approved with less stringent checks.
Regulatory reforms like SAMA’s imposing a minimum capital requirement (SAR 5 million) and capping consumer BNPL exposure (SAR 5,000) are important steps to mitigate systemic risk by ensuring BNPL providers have sufficient capital buffers and consumers do not accumulate unmanageable debt levels.
But while regulatory measures are essential, individual financial behavior ultimately holds greater significance in preventing overleveraging. Consumers can circumvent caps by distributing borrowing across multiple credit providers outside regulatory purview, thus accumulating excessive debt despite imposed limits. Sustainable debt management relies on consumers' prudent borrowing decisions.
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Islam Zween
The Data Overview
Argaam³ Intelligence
The digital lending market—including fintechs and BNPL providers—was valued at USD
billion in 2024 and is projected to grow at a CAGR of 13.45%, reaching USD
billion by 2030.
The BNPL segment is also expected to continue robust growth, expanding from USD 1.31 billion in 2024 to approximately USD 2.36 billion by 2030 (CAGR:9.7%).
Banks remain the dominant lenders
accounting for
of total consumer loans, but NBFCs and fintechs are expanding their share, particularly in BNPL and microfinance
Non-bank finance companies saw even faster personal finance growth (18.6% y/y).
Bank’s personal consumer loans grew 6.6% y/y to SAR 470.99 billion in 2024, while credit card lending surged 15.88% y/y to SAR 31.37 billion, reflecting both digital adoption and changing consumer preferences.
Banks and fintechs are innovating with AI-driven credit scoring, mobile wallets, and Shariah-compliant products to capture new segments.
Total Consumer Loans
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Total consumer loans (comprising both personal consumer loans and credit card loans) grew by 7.14% y/y to SAR 502.36 billion in 2024 from SAR 468.9 billion in 2023.
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In Q4 2024, total consumer loans rose by 7.14% y/y, compared to 4.59% y/y in Q3 2024. Over a 5 year period, total consumer loans rose from SAR 383.62 billion in 2020 to SAR 502.36 billion in 2024 i.e. an increase of 30.95% over a 5-year period.
Consumer Loan Composition
Over the past 5 years, personal consumer loans accounted for an average of 94.8% of total consumer loans (which include auto loans and credit card debt)
in Saudi Arabia.
Credit card loans accounted for an average of 5.2% of total consumer loans during this period.
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Total consumer loans accounted for 17% of total bank loans in 2024, compared to 18.15% of total loans in 2023. The share has been rapidly falling after 2021, when it stood at 21.75%. It peaked in 2017 (23.47%)
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Personal Consumer Loans: grew by 6.6% y/y to SAR 470.99 billion in 2024, from SAR 441.83 billion in 2023. In 2020, it was SAR 365.25 billion, i.e. over a 5-year period, personal consumer loans grew by 28.95%.
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On a quarterly basis, personal consumer loans grew in every successive quarter after Q4 2023 (SAR 441.83 billion) to Q4 2024 (SAR 470.99 billion) .
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Further, personal consumer loans grew by 6.6% y/y in Q4 2024, compared to 4.01% y/y in Q3 2023 and rose y/y sharply in ever successive quarter after Q1 2024 (where they grew by just 0.6% y/y).
Finance Companies
Growth in personal finance from finance companies – reflects their increasing role in serving underserved segments and micro-borrowers.
Finance companies rapidly gaining ground – particularly in microfinance and digital niches (like BPNL). SAMA had licensed 66 finance companies by May 2025.
They rely on equity (using their own capital or funds raised from investors), interbank loans (they borrow money from other banks), or capital markets (they raise funds by issuing debt instruments for funding, leading to higher interest rates but also expanding credit access for higher-risk customers.
Fintech-driven models, including debt-based crowdfunding (where multiple individual investors collectively lend money to a borrower) are further broadening the sector’s reach.
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Credit card loans rose by 15.88% y/y to SAR 31.37 billion in 2024, from 27.07 billion in 2023.
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Between 2020 and 2024, the same rose by a whopping 238.81% i.e. from SAR 18.37 billion in 2020 to SAR 31.37 billion in 2024. In Q4 2024, credit card loans rose by 15.88% y/y, compared to a growth of 14.27% y/y in Q3 2024.
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Notably, credit card loans rose in every successive quarter after Q1 2021 (when they stood at SAR 17.76 billion) to Q4 2024 (reached SAR 31.37 billion – a record high).
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Finance Companies/Credit Cards Loans: SAR 1.94 billon in 2024 from SAR 1.27 billion in 2024 i.e. an increase of 53% y/y in 2024.
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Surge in credit card loans reflects a major shift toward digital, cashless payment habits in the Kingdom.
This report is produced by
combining expert human analysis with advanced data tools. All insights reflect the editorial judgment of the team, supported — but not replaced — by AI technologies.