Dublin, Feb. 25, 2025 (GLOBE NEWSWIRE) -- The "Saudi Arabia Consumer Finance Market, By Region, Competition, Forecast & Opportunities, 2020-2030F" report has been added to ResearchAndMarkets.com's offering.
The Saudi Arabia Consumer Finance Market was valued at USD 356.72 Billion in 2024, and is expected to reach USD 973.97 Billion by 2030, rising at a CAGR of 18.28%
The Saudi Arabia consumer finance market is expected to continue its growth trajectory, driven by the ongoing economic diversification, digital transformation, and demographic changes. The demand for consumer finance products, such as personal loans, mortgages, and BNPL services, will likely remain strong as consumers continue to seek financing solutions to support their consumption habits. Additionally, the growth of digital payments and fintech services will expand the market's accessibility, especially for younger, tech-savvy consumers who prefer online platforms. According to CEIC and as reported by the Saudi Central Bank, Saudi Arabia's bank loans for consumers were recorded at 452,321.357 SAR million in June 2024. This represents an increase from the previous figure of 450,887.301 SAR million in March 2024.
Economic Diversification under Vision 2030
Saudi Arabia's Vision 2030 is a key driver of the consumer finance market's growth. This ambitious blueprint for economic diversification is focused on reducing the country's reliance on oil revenues and building a more sustainable, diversified economy. Vision 2030 emphasizes the development of non-oil sectors, including retail, real estate, tourism, and financial services, which directly impact the demand for consumer finance products. As more sectors grow, there is an increased need for personal financial products, such as loans, mortgages, and credit cards, to cater to the evolving demands of the population.
Furthermore, Vision 2030 seeks to boost the financial inclusion of underserved populations, enhancing access to banking services for young people, women, and rural communities. This is expected to significantly increase the uptake of consumer finance products, as more people are empowered to manage their finances and access credit for the first time.
The government has also implemented various reforms to encourage consumer spending, such as providing subsidies for homeownership and easing restrictions on car loans. In its 2024 budget, the Saudi government allocated SAR 1.25 trillion to the infrastructure, healthcare, and education sectors, opening up substantial opportunities for financial institutions to offer loans. Moreover, The Minister of Finance has approved a plan that outlines public debt developments and initiatives for the debt markets. The plan anticipates financing requirements of around SAR 86 billion to cover debt maturities and the projected budget deficit for 2024, reflecting a well-organized approach to managing government financing activities.
Technological Advancements in Fintech
Consumers can now apply for loans, make payments, and manage their accounts seamlessly through their smartphones, reducing the need for in-person banking and improving the overall user experience. Additionally, the rise of digital payment solutions, such as Apple Pay, STC Pay, and other local mobile wallets, is encouraging consumers to adopt cashless payment methods, which complement the expansion of consumer credit.
Furthermore, fintech innovations have led to the growth of alternative credit scoring models, which use non-traditional data points, such as transaction history and spending habits, to evaluate creditworthiness. This is making it easier for individuals who may not have a traditional credit history to access loans and credit. As a result, more people in Saudi Arabia, including those from previously underserved populations, can now participate in the consumer finance market. The Saudi government is also supportive of the fintech sector, with regulations and policies aimed at fostering innovation and ensuring the security and transparency of digital financial services.
Key Market Challenges
High Levels of Household Debt
One of the major challenges facing the Saudi Arabia consumer finance market is the growing levels of household debt. As more consumers access credit for personal loans, mortgages, and consumer goods, the risk of overleveraging becomes significant. In 2024, an increasing number of consumers are struggling to meet their repayment obligations, which can lead to financial instability for households.
Regulatory and Compliance Challenges
The rise in fintech solutions, which offer new and innovative ways for consumers to access credit, also raises concerns around the oversight of these new services. Authorities need to strike a balance between fostering innovation in the fintech sector and maintaining strict regulations that prevent fraud, money laundering, and cybersecurity risks. The regulatory environment also poses challenges to international financial institutions entering the Saudi market. Adhering to local regulations while offering competitive services can be a significant hurdle for foreign players.
Type Insights
Secured consumer finance was the dominating segment in the Saudi Arabia consumer finance market, accounting for a significant share of the overall market due to its favorable terms for both lenders and borrowers. In secured financing, loans are backed by collateral, such as property, vehicles, or other valuable assets, reducing the risk for financial institutions. As a result, lenders are more willing to offer larger loan amounts at lower interest rates, making it an attractive option for consumers seeking substantial financing. The increasing demand for real estate and automobiles in Saudi Arabia plays a key role in the dominance of secured consumer finance.
Government initiatives, such as affordable housing programs and incentives for car ownership, have further fueled this demand, encouraging consumers to opt for secured loans to finance these major purchases. Additionally, the growing number of middle-income families and the expansion of the Saudi economy under Vision 2030 contribute to a higher uptake of secured loans. Financial institutions are continuously developing tailored secured financing products to meet the diverse needs of consumers, enhancing accessibility and convenience. As secured loans offer more stability and lower risk, they remain the most favored and dominant financing option in Saudi Arabia consumer finance sector, a trend that is likely to persist in the coming years.
Key Market Players
- Al Rajhi Banking & Investment Corporation SJSC
- National Commercial Bank SJSC
- Riyad Bank SJSC
- Saudi British Bank
- Samba Financial Group SJSC
- Saudi Investment Bank SJSC
- Alinma Bank SJSC
- Banque Saudi Fransi SJSC
- Alawwal Bank
- Arab National Bank
Key Topics Covered:
1. Introduction
2. Research Methodology
3. Executive Summary
3.1. Market Overview
3.2. Market Forecast
3.3. Key Regions
3.4. Key Segments
4. Voice of Customer
4.1. Factors Influencing Availing Decision
4.2. Source of Information
5. Saudi Arabia Consumer Finance Market Outlook
5.1. Market Size & Forecast
5.1.1. By Value
5.2. Market Share & Forecast
5.2.1. By Type Market Share Analysis (Unsecured Consumer Finance, Secured Consumer Finance)
5.2.2. By Regional Market Share Analysis
5.2.2.1. Northern & Central Market Share Analysis
5.2.2.2. Western Market Share Analysis
5.2.2.3. Southern Market Share Analysis
5.2.2.4. Eastern Market Share Analysis
5.2.3. By Top 5 Companies Market Share Analysis, Others (2024)
5.3. Saudi Arabia Consumer Finance Market Mapping & Opportunity Assessment
5.3.1. By Type Market Mapping & Opportunity Assessment
5.3.2. By Region Market Mapping & Opportunity Assessment
6. Saudi Arabia Unsecured Consumer Finance Market Outlook
6.1. Market Size & Forecast
6.1.1. By Value
6.2. Market Share & Forecast
6.2.1. By Product Type
6.2.1.1. Saudi Arabia Personal Loan Market Share Analysis
6.2.1.2. Saudi Arabia Home Improvement Loan Market Share Analysis
6.2.1.3. Saudi Arabia Credit Card Market Share Analysis
6.2.1.4. Saudi Arabia Consumer Durable Finance Market Share Analysis
6.2.1.5. Saudi Arabia Education Loan Market Share Analysis
7. Saudi Arabia Secured Consumer Finance Market Outlook
7.1. Market Size & Forecast
7.1.1. By Value
7.2. Market Share & Forecast
7.2.1. By Product Type
7.2.1.1. Saudi Arabia Collateral Loan Market Share Analysis
7.2.1.2. Saudi Arabia Housing Loan Market Share Analysis
7.2.1.3. Saudi Arabia Auto Loan Market Share Analysis
8. Market Dynamics
8.1. Drivers
8.2. Challenges
9. Market Trends & Developments
10. SWOT Analysis
10.1. Strength
10.2. Weakness
10.3. Opportunity
10.4. Threat
11. Policy & Regulatory Landscape
12. Saudi Arabia Economic Profile
13. Competitive Landscape
13.1. Company Details
13.1.2. Products & Services
13.1.3. Financials (As Per Availability)
13.1.4. Key Market Focus & Geographical Presence
13.1.5. Recent Developments
13.1.6. Key Management Personnel
For more information about this report visit https://www.researchandmarkets.com/r/e7ilfb
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