Lendo aims to bridge financing gap for SMEs in Saudi Arabia

• Saudi Vision 2030’s goal is to significantly expand SME lending from 4% in 2018 to 20% by 2030.

Saudi Arabia-based Shariah-compliant crowdlending marketplace – Lendo – has signed a Memorandum of Understanding (MOU) with J.P. Morgan to improve access to financing for small and medium-sized enterprises (SMEs) across the country. 

J.P. Morgan and Lendo are working together on potential opportunities to support the SME sector in Saudi Arabia in growing and sustaining the remarkable demand in this market.

“This strategic collaboration with J.P. Morgan, a pioneer in the financial industry, marks a significant milestone for Lendo,” Osama Alraee, CEO and co-founder of Lendo, said.

“By combining our strengths, we’ll deliver cutting-edge financial solutions to SMEs, supporting their growth and contributing directly to the realisation of Saudi Arabia’s Vision 2030.”

The SME financing landscape in MENA presents a substantial market opportunity as limited financial access continues to restrict the growth of the region’s businesses, with commercial banks hesitant to issue loans to SMEs at scale, resulting in a high percentage of declined financing requests annually.

The total SME financing gap in developing countries is estimated to be approximately $5.2 trillion, according to the International Finance Corporation (IFC).

Lendo’s debt crowdfunding platform aims to bridge the financing gap for SMEs, aligning with Saudi Vision 2030’s goal to significantly expand SME lending from 4 per cent in 2018 to 20 per cent by 2030.

According to the latest available report from the Saudi Central Bank (SAMA), the total value of debt crowdfunding in Saudi Arabia surged from 1.4 million Saudi riyals (SAR) in 2019 to SAR 771 million in 2022, marking a remarkable growth.

Lendo raised 132 million Saudi riyals ($35.2 million) in total funding from leading investors, including the most recent Series B led by Sanabil Investments, a wholly-owned company by the Public Investment Fund (PIF).

Since its inception in December 2019, Saudi fintech Lendo has processed over 5,000 financing transactions on its platform, providing over SAR 2 billion ($600 million) in financing to SMEs and generating SAR 280 million ($74 million) in returns for investors.