Digital Credit Access in Middle East Shows Two-Speed Trajectory

Digital credit access in the Middle East is developing at disparate speeds, with Gulf Cooperation Council (GCC) nations leading the way while other countries face significant structural challenges. CRIF GmbH's analysis indicates that GCC nations, such as the UAE and Saudi Arabia, benefit from proactive regulatory frameworks, robust infrastructure, and high smartphone penetration.

These factors have facilitated substantial adoption of digital consumer credit, with 25–40% of consumer credit being digital. While the SME lending sector is less digitized, digital solutions are increasingly being utilized. Meanwhile, other Middle Eastern countries contend with limited Know Your Customer (KYC) data, a lack of structured business datasets, and a large unbanked population, hindering digital lending and creditworthiness assessments.

Consumers are the most active users of digital credit products like credit cards, personal loans, and mortgages. In the UAE, in particular, digital mortgages and Buy Now, Pay Later (BNPL) solutions are gaining traction. Businesses, conversely, seek credit for working capital needs and asset purchases, but digital solutions such as invoice discounting are unevenly adopted.

Challenges to credit access, especially in GCC countries, include assessing the credit history of a significant expatriate population and managing risks associated with new migrants. Organized fraud also presents an issue. The analysis underscores the need for tailored strategies to bridge the digital divide and scale inclusive credit access across the region, despite some advancements like the issuance of digital bank licenses in Iraq.