KSA Loan Aggregator Market Outlook to 2027

Market Overview:

The Kingdom of Saudi Arabia (KSA) is seeing notable developments in its financial services sector, particularly in the realm of loan aggregation. Loan aggregators serve as intermediaries connecting borrowers with lenders. These play a pivotal role in streamlining the loan application process. The economic scenario of KSA serves as a foundational pillar for the loan aggregator market. Economic stability, growth indicators such as GDP, employment rates, and inflation directly affect the demand for loans.

Government regulations wield significant influence over financial services, and the loan aggregator market is no exception. Changes in regulations can change licensing requirements, operational parameters, and compliance standards. Staying updated about these regulatory shifts is crucial for the players in the loan aggregation space. In a rapidly evolving digital landscape, technological innovations are changing the financial services industry. Digital platforms and mobile applications are capable of enhancing the accessibility and efficiency of loan aggregation services. Fintech advancements, in particular, are poised to play a transformative role in shaping the market.

The Kingdom of Saudi Arabia (KSA) loan aggregator industry consists of a diverse ecosystem of players. Traditional banks and financial institutions act as lenders, while fintech startups and online loan aggregator platforms serve as intermediaries, connecting borrowers with multiple lending options. Regulatory bodies oversee compliance and insurance companies & government initiatives contribute to overall financial landscape.

KSA Loan Aggregator Market Analysis

• The market has gained its highest growth in 2018 and 2019, with the development of increasing user base and revenue for Souqalmal, the then market leader in the Kingdom.
• Online Loan Aggregators has experienced limited opportunity with only two aggregators established in 2022.
• With increasing digital adoption and internet penetration, the loan aggregator market has almost doubled in the last five years in the country.
• Loan aggregators have started asking their partnered institutions to use AI in lending process to enhance loan experience. The algorithms can help in Predictive analysis, chat bots, Fraud detection, risk analysis etc.
• With technologies like fingerprint scanning, face and voice recognition, eye scanning, etc. digital lenders have been able to prevent data security threats and breaches too.
• The amount of loan disbursed through online and offline aggregatorsremainsless than 5%of the total loan disbursedin the country.

Key Trends by Market Segment:

By Mode of Operation: In 2022, KSA Loan aggregator market is segmented by mode of operation, with segments including online & offline. Online mode of operation is dominating with ~80% market share. Online platforms in KSA offer convenience and accessibility to users, which allow them to compare and apply for loans from the comfort of their homes or any location with internet access. This ease of use is particularly appealing to consumers.

By Loan Type: In 2022, the type of loans is segmented to Home Loans, Credit Cards, Personal, Auto, SME/Commercial. Out of these, Personal loan dominates this segment with ~40% market share. Many personal loans come with a quick approval process and fast disbursement of funds. This is helpful for individuals who need immediate access to funds for emergencies or time-sensitive expenses.

By Region: In 2022, the region is segmented into the following regions: Al Madinah, Makkah, Asir, Ar Riyadh and Ash Sharquiah. Ar Riyadh is dominating the loan aggregator market with 27% of market share. Riyadh is the financial hub of Saudi Arabia. Being the center of economic activities, it usually attracts businesses and financial institutions, including those in the loan aggregation sector.

Competitive Landscape:

Major Players in KSA Loan Aggregator Market

• YallaCompare is the leading finance comparison site in the entire Middle East region.
• It was founded in 2011 due to inefficiency in the market for conveniently finding information about various financial products and services.
• At global level, YallaCompare utilizes SSL technology to encrypt database, Intuitive navigation, Unified app to support country-wise insurance policies and financial products, multilingual support, comparison workflow & Live chat among other features.
• Another leading company is Creative Future for Digital Brokerage- Taweel. It acts as a unified portalfor accepting applications from individuals and corporates who wish to obtain financingor credit cards through the website or mobile application.
• All operations on Tanweel are electronic. The information in loan application is authenticated via National Information Centre, Simah, Thiqah, Elm or Bayan.
• The well-established market of Fintechs in KSA paves the way for further development in the online loan aggregator sector.

Recent Developments:

• Sept 2023: SAMA (Saudi Arabia Monetary Authority) issued a license to Creative Future for Digital Brokerage which permits them to conduct finance aggregation services in Saudi Arabia.
• Jul 2023: SAMA (Saudi Arabia Monetary Authority) announced that it would begin accepting applications for its sandbox programs in January 2018. It has fueled fintech’s growth in Saudi Arabia with controlled testing environment for financial institutions and startups.
• Oct 2021: Saudi Arabia Tourism Development Fund (TDF) has launched digital lending service with Temenos in 60 days. TDF claim that this will solve the problems of investors & companies in the tourism industry.

Future Outlook:

• The market will grow at a CAGR of 16.6% during 2022-2027 due to high growth in online loan aggregator players.
• Major investments in petrochemicals, manufacturing, & logistics will uplift the need for lubricants in machinery, processing plants & transportation fleets.
• Globally, the financial sector including Saudi Arabia, has been undergoing digital transformation. This includes the adoption of online and mobile banking services.
• Increasing internet penetration and smartphone usage in Saudi Arabia, more people are likely to turn to online platforms for financial services, including loan comparison and aggregation.
• Fintech companies which include loan aggregators will leverage innovative technologies like artificial intelligence and machine learning to enhance their services and provide more personalized loan options.