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6/30/25, 3:13 PM Bridging the liquidity gap for small businesses in the Middle East | Khaleej Times

specialised products to customise, and integration inefficiencies vis-a-vis fintechs, from which flow
streamlined access. Funding has been mismatched with the active capital requirements of emerging
businesses in Mena due to that reason. Many businesses face payment delays, regulatory opacity,
and the lack of tailored lending products that recognise the unique rhythms of small enterprise cash
flows. Even growth-ready SMEs, which should ideally transition into mid-sized ventures, often

stumble at the financing hurdle — not for lack of demand, but because financial institutions have
failed to adapt.

The urgency of now

The timing could not be more critical. As Mena economies intensify their efforts toward non-oil

diversification, SMEs are expected to play a crucial role — from creating jobs to driving innovation
and enhancing resilience. Yet they remain among the most vulnerable when liquidity tightens, as
seen during the COVID-19 pandemic and the ongoing global recalibration of interest rates.

New programmes under Saudi Arabia’s Financial Sector Development Program (FSDP) aim to raise
SME lending from 5.7 per cent to 20 per cent by 2030. Similarly, the UAE’s NextGenFDI initiative
focuses on enabling digital companies, many of which are SMEs, to scale quickly. These policy shifts

are significant. However, bridging the gap between promise and reality requires faster action, deeper
innovation, and, above all, a financial system designed around how SMEs operate, not how they
have operated in the past.

Fintechs are not just filling gaps — they are rebuilding foundations

Digital transformation is bringing about one of the greatest changes in current times: the emergence

of fintechs, which are redefining SME finance. Unlike conventional banks with legacy systems,
fintechs access SME workflows — marketplaces, accounting software, or ERP systems — and
deeply embed financial services. This deep-level integration allows SMEs to access financing, effect
payments, and track cash flow without leaving the very digital ecosystem through which they run their

businesses.

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