29 May, 2023
Private credit is a vast and rapidly expanding market that is becoming increasingly prevalent across the globe, offering a diverse range of investment strategies with unique risk and return profiles that differ from those of other asset classes. By providing low correlation with public equities, private credit can also offer investors valuable diversification benefits. However, investing in private credit can be challenging due to its illiquidity and higher credit risk, which necessitates careful evaluation of individual strategies and their distinctive risks and characteristics before investing.
Saudi Arabia, one of the world’s fastest-growing economies, boasts a credit market valued at 2.4 trillion SAR as of 2022, dominated by banks and non-bank financial institutions (NBFIs). Nevertheless, despite the sustained expansion of the credit market, financing for small and medium-sized enterprises (SMEs) accounts for less than 10% of the overall market size.
In light of these developments, we are publishing a comprehensive overview of the global rise of private credit, and exploring the intersecting opportunities within Saudi Arabia’s burgeoning credit market for investors and business owners alike. We trust that our research will aid many market participants in the private credit market to help in addressing the SME financing gap in the Kingdom.