Saudi Arabia’s small and medium-sized enterprises (SMEs) secured a significant increase in financing during 2025, with outstanding credit reaching around SAR467.7 billion ($124.5 billion), according to a new industry report.
The figure represents growth of roughly 33% from the previous year, highlighting the continued expansion of financing available to smaller businesses across the Kingdom. Yet SME lending remains well below the level targeted under Saudi Arabia’s Vision 2030 programme.
SME financing accounted for 11.3% of overall bank lending at the end of 2025, compared with the Vision 2030 objective of raising that share to 20%.
An analysis by ZCG Arabia estimates the difference translates into a financing shortfall of more than SAR300 billion ($80 billion). The estimate is based on the firm’s internal analysis and has not been independently verified.
The findings appear in ZCG Arabia’s latest paper, Closing the Gap: Shariah-Compliant Private Credit and the Next Phase of SME Finance in Saudi Arabia. The report examines how the Kingdom’s financing market is changing as SMEs become larger and their funding requirements more complex.
The financing challenge is increasingly not limited to companies struggling to obtain conventional bank loans. Established businesses are also looking for capital to fund expansion, acquisitions, capital expenditure, supply-chain investments and working-capital requirements.
Against that backdrop, private credit could provide an additional financing channel alongside commercial banks, particularly for businesses whose funding needs fall outside traditional lending structures.
The report points to Shariah-compliant private credit as another potential source of capital, amid strong demand for Islamic investment products and a relatively limited supply of institutional-quality private credit opportunities.
Saudi Arabia is already one of the world’s major Islamic finance markets, with interest in institutional investment opportunities coming from investors including family offices and private wealth groups.
ZCG Arabia has established a direct financing platform in the Kingdom aimed at providing Shariah-compliant funding to businesses, drawing on the firm’s experience in global private credit markets.
Its approach includes senior secured and asset-backed financing structures, alongside other Shariah-compliant solutions designed around the requirements of established Saudi SMEs. The platform places emphasis on underwriting standards, capital preservation, downside protection and risk management.
The report argues that banks will continue to play a central role in financing the Saudi economy, while alternative sources of institutional capital could widen the range of funding available to businesses.
As the private sector grows and companies require increasingly sophisticated forms of capital, the development of private credit could become an additional component of Saudi Arabia’s evolving SME finance landscape.
