Saudi Central Bank (SAMA) has licensed Madd Balas to provide debt-based crowdfunding solutions, bringing the total number of companies offering debt-based crowdfunding in Saudi Arabia to 14, the bank said on November 24.

Debt-based crowdfunding in Saudi Arabia is now a regulated, fast-growing part of the fintech and SME finance ecosystem, operating under licenses from the SAMA and the Capital Market Authority (CMA).

The latest announcement brings the total number of finance companies licensed by SAMA to 69 companies and comes as part of an increasingly relaxing approach to finance in the kingdom.

The decision reflects SAMA's efforts to support the finance sector, increase the efficiency of financial transactions and promote innovative financial solutions for financial inclusion in Saudi Arabia.

SAMA said the importance of dealing exclusively with authorised financial institutions. Licensed and permitted financial institutions can be viewed on SAMA's official website.

Debt-based crowdfunding allows businesses and individuals to raise financing through loans from multiple investors via digital platforms, providing an alternative to traditional bank lending.

The sector has expanded in Saudi Arabia as part of efforts to diversify financial services and support small and medium enterprises under Vision 2030.

The Central Bank regulates crowdfunding activities to ensure consumer protection and maintain financial stability whilst encouraging innovation in the financial services sector.

The CMA recently approved a regulatory framework that enables licensed firms to offer sukuk (Islamic bonds) and other debt instruments through crowdfunding platforms.

This new framework is designed to expand access to finance, support fintech growth, and diversify funding sources within the Kingdom. It allows licensed institutions to offer crowdfunding-based debt as part of exempted offerings and broadens participation in the debt market.

The implementation follows an experimental phase that began in 2021, which saw market activity increase significantly, with sukuk crowdfunding issuance rising from SR1.5bn in 2023 to SR3.4bn in 2024. The number of licensed platforms also grew to 17 by 2024, up from 14 the previous year.