Fintech Opportunities in the Middle East
By Daniel Rajkumar | 26/10/2024
Peer-to-peer (P2P) lending in the Middle East has grown significantly, driven by technological advancements, favourable regulation, and strong demand for alternative financing. The United Arab Emirates (UAE) and Saudi Arabia are emerging as key markets, largely due to their fintech initiatives and supportive government policies.
In the UAE, platforms like Beehive, the first to receive regulatory approval from the Dubai Financial Services Authority, have expanded rapidly, providing lending options for small to medium-sized enterprises (SMEs). This regulatory backing has fostered trust among borrowers and investors, positioning the UAE as a leader in P2P lending within the region. Saudi Arabia is also advancing its P2P landscape, with numerous platforms gaining traction. Saudi Arabia's Vision 2030 program has actively promoted fintech innovation, supporting P2P growth through regulatory sandboxes that allow platforms to innovate while ensuring consumer protection.
Investment in the Saudi P2P sector is also growing, with platforms securing substantial funding to expand their offerings. This increased investment highlights the region's interest in alternative lending models that bypass traditional banking channels, especially for underserved SMEs. The Middle Eastern P2P lending market, projected to grow at over 30% CAGR through 2031, is attracting international investors who see potential in the region’s expanding fintech ecosystem.
We've been impressed with recent fintech developments in the Middle East. These developments indicate that the Middle East’s P2P lending market is on a robust growth trajectory, focusing on expanding financial inclusion and supporting the regional entrepreneurial ecosystem.
WLCF is keen to support Fintech entrepreneurs, to prepare, we have been working with firms to create Shariah Compliant financial products, including Murabaha (asset finance), Wakala (agency) and Iraja (leasing).
We have experience of working with the various national ID verification systems to support the AML & KYC process and will integrate with national providers at no extra cost.
Since 2018, WLCF have been working with Mansur Mannan, ex British Islamic Bank on a Shariah Compliant platform called Aafiyya Islamic Finance, though this platform is yet to launch owing to the need to change some rules with HMRC to remove a VAT cost for customers. Mr Mannan has provided us with a good reference, which we are happy to share on request.
WLCF has exhibited in Dubai and we look forward to exhibiting at many future fintech conferences. Follow us on LinkedIn to see which conferences we'll be at and feel free to reach out to learn more about what we can do for you.