Saudi Arabia Personal Loan Market Research Report, 2030

The Saudi Arabia personal loan market has experienced robust growth in recent years, driven by shifting financial behaviors, increased consumer awareness, and the government’s proactive initiatives to diversify the economy under Vision 2030. Personal loans have become a preferred financial tool for consumers, addressing a wide range of needs such as debt consolidation, education, home improvements, and medical emergencies. One of the key factors fueling this growth is the increasing adoption of digital financial services, which has revolutionized the lending process, offering speed, convenience, and accessibility to borrowers. The rapid urbanization and economic development in Saudi Arabia have further strengthened the demand for personal loans, as individuals increasingly seek financial solutions to fund their aspirations. Additionally, Sharia-compliant financial products have gained immense popularity due to their alignment with Islamic principles, offering ethical lending options that adhere to the region’s cultural and religious values. These products have expanded the reach of personal loans to a broader demographic, including consumers who prioritize interest-free borrowing. The emergence of digital lending has reduced barriers for first-time borrowers and individuals with limited access to traditional financial services, further accelerating market growth. As Saudi Arabia continues its journey toward economic diversification, the personal loan sector is poised to benefit from increasing consumer confidence, rising disposable incomes, and a supportive regulatory environment. According to the research report, “Saudi Arabia personal loan Market Research Report, 2030," published by Actual Market Research, the Saudi Arabia personal loan market is anticipated to grow at more than 18.05% CAGR from 2025 to 2030. It is fueled by favorable macroeconomic conditions, technological advancements, and evolving consumer preferences. Economic indicators such as employment rates, GDP growth, and consumer spending patterns directly influence the demand for personal loans. During periods of economic expansion, individuals are more likely to take loans, confident in their ability to repay. Conversely, economic downturns may lead to cautious borrowing behavior as consumers become risk-averse. The regulatory environment in Saudi Arabia, governed by the Saudi Central Bank (SAMA), ensures transparency and consumer protection, fostering trust in the financial system. Regulatory reforms aimed at promoting responsible lending and curbing predatory practices have further encouraged consumer participation in the formal lending sector. Interest rates remain a critical determinant of borrowing trends. When rates are low, borrowers are incentivized to take loans for personal and business purposes, while higher rates may deter loan demand. Technological innovations in credit scoring, risk assessment, and loan disbursement have significantly improved the efficiency and accuracy of the lending process. Lenders are now leveraging artificial intelligence (AI) and machine learning to analyze alternative data points, such as spending patterns and social behavior, enabling them to expand credit access to underserved segments. This trend aligns with Vision 2030’s goal of financial inclusion, ensuring that individuals across all income levels can participate in the formal economy.

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The Saudi personal loan market is divided into two main categories: secured and unsecured loans, each designed to meet different borrower needs and financial situations. Secured loans are backed by collateral, such as property, vehicles, or savings, which reduces the risk for lenders. This lower risk allows lenders to offer more favorable terms, including lower interest rates, making secured loans attractive to borrowers who need larger sums of money. These loans are often used for long-term investments like home construction, business expansion, or purchasing expensive assets. The collateral requirement also makes secured loans a viable option for individuals with limited credit histories or lower credit scores, as the lender's risk is mitigated by the collateral provided. While secured loans provide affordability, they come with the inherent risk that the borrower could lose their property if they fail to repay the loan. On the other hand, unsecured loans, which do not require any form of collateral, cater to a different type of borrower, particularly those who may not have valuable assets to pledge or prefer not to risk their property. Although these loans are more accessible, they come with higher interest rates due to the increased risk for lenders. Unsecured loans are commonly used for smaller financial needs, such as debt consolidation, medical expenses, or emergency funds. The demand for unsecured loans has risen in recent years, supported by advancements in credit scoring systems and the use of alternative data sources, allowing lenders to evaluate borrower profiles more comprehensively. Additionally, Sharia-compliant loans, available in both secured and unsecured formats, are gaining popularity in Saudi Arabia. Sharia-compliant loans cater to the growing demand for ethical banking solutions, offering consumers an alternative to conventional loans. The sources of personal loans in Saudi Arabia are diverse, with traditional banks, Islamic banks, non-banking financial companies (NBFCs), and fintech firms all contributing to the dynamic market. Traditional banks are the dominant players in the Saudi lending landscape, providing a broad array of personal loan products, competitive interest rates, and extended repayment terms. These banks typically cater to borrowers with stable incomes and good credit histories, offering both secured and unsecured loans. They have a long-established presence and are trusted by consumers for their reliability and stability. For borrowers who meet the stringent criteria of creditworthiness, traditional banks often provide lower interest rates and more favorable repayment conditions. Islamic banks, which adhere to Sharia principles, have become increasingly popular among consumers who seek ethical financing options. Islamic banks offer both secured and unsecured loan products, ensuring that a wide range of financial needs are met while maintaining transparency and fairness in transactions. Non-banking financial companies (NBFCs) have emerged as key players, particularly in serving underserved segments of the population, such as individuals with irregular incomes or limited credit histories. These institutions typically offer more flexible loan terms and faster approval processes, though their interest rates are often higher than those of traditional banks. The collaboration between traditional lenders and fintech firms has enhanced the availability and accessibility of personal loans, contributing to increased financial inclusion across the country. The variety of lenders ensures that consumers in Saudi Arabia have access to a broad spectrum of loan options, depending on their credit profiles, financial needs, and preferences. Interest rates on personal loans in Saudi Arabia vary based on the type of loan, the borrower’s profile, and the loan tenure. Both fixed-rate and variable-rate loans are available, providing consumers with different options depending on their financial goals and risk tolerance. Fixed-rate loans are particularly popular among borrowers who seek stability and predictability in their monthly payments. With fixed-rate loans, the interest rate remains constant throughout the loan term, offering borrowers the security of knowing exactly how much they will pay each month. This predictability is beneficial for long-term financial planning and makes fixed-rate loans a favored choice for large purchases, home renovations, education expenses, or debt consolidation. The ability to lock in an interest rate over the life of the loan protects borrowers from potential market fluctuations and rate hikes. Islamic banks, which adhere to Sharia principles, typically offer fixed-rate, Sharia-compliant loans, ensuring that borrowers can access ethical financing solutions without the concern of interest rate changes. In contrast, variable-rate loans are tied to benchmark interest rates, such as those set by the Saudi Arabian Monetary Authority (SAMA). These loans generally offer lower initial interest rates compared to fixed-rate loans, making them attractive to borrowers who are looking for short-term financial solutions or who believe interest rates will remain stable or decrease during the loan term. However, variable-rate loans come with the risk that interest rates may rise, leading to higher monthly payments. Borrowers who choose variable-rate loans are typically willing to accept this risk in exchange for lower initial costs.

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Nikita Jabrela

Business Development Manager

Considered in this report • Historic Year: 2019 • Base year: 2024 • Estimated year: 2025 • Forecast year: 2030 Aspects covered in this report • Personal Loan Market with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Loan Type • Secured Loans • Unsecured Loans

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By Source • Banks • Non-Banking Financial Companies (NBFCs) • Digital Lenders By Interest Rate • Fixed Rate • Variable Rate The approach of the report: This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and listing out the companies that are present in the market. The secondary research consists of third-party sources such as press releases, annual report of companies, analyzing the government generated reports and databases. After gathering the data from secondary sources primary research was conducted by making telephonic interviews with the leading players about how the market is functioning and then conducted trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers in regional aspects, tier aspects, age group, and gender. Once we have primary data with us we have started verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to agriculture industry, government bodies and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.