Saudi Fintech Erad Raises $16M to Bridge Gulf SME Funding Gap
Erad aims to address the Gulf’s estimated $250 billion credit shortfall for small businesses using data-driven lending platforms.
Riyadh-based fintech Erad has secured $16 million in pre−Series A funding, led by Silicon Valley’s YCombinator and regional investors, to expand its Sharia−compliant financing services for SMEs. The startup, which has raised $27 million to date, aims to address the Gulf’s estimated $250 billion credit shortfall for small businesses using data-driven lending platforms.
Saudi SMEs received SAR 352 billion ($94 billion) in credit during 2024- a 28% annual increase- with banks accounting for 95% of lending. Erad’s growth aligns with efforts to diversify funding sources across the kingdom, including Monshaat’s 80% loan guarantees to incentivise lenders.
The Gulf’s SME sector, representing 29% of Saudi Arabia’s GDP in 2023, remains underserved despite rapid credit expansion. Erad’s model focuses on streamlining access to finance for businesses excluded by traditional banking criteria.
