JEDDAH: Saudi Arabia’s Tamara Finance Co. has received approval to provide credit services, increasing the total number of licensed lending companies in the Kingdom to 65.
Saudi Central Bank, or SAMA, announced it has granted the company approval to offer consumer finance and buy now, pay later services, emphasizing that this move reflects the bank’s commitment to supporting the growth of the finance sector.
It will also improve the efficiency of financial transactions, and advance innovative solutions that promote financial inclusion across Saudi Arabia, according to a statement.
The approval aligns with Saudi Arabia’s Vision 2030 objectives to strengthen the digital economy, expand financial inclusion as outlined in the country’s Financial Sector Development Program, and increase the share of cashless transactions to 70 percent by 2025, up from 36 percent in 2019.
Tamara became the first Saudi fintech startup to reach a $1 billion valuation after raising $340 million in its series C funding round in December 2023.
The firm’s growth comes as BNPL offerings are being increasingly used throughout the Kingdom.
A 2024 report from leading provider Tabby reveals that 77 percent of Saudi consumers now use such services for essential purchases.
Tabby’s data indicates that first-time BNPL transactions are twice as likely to be for essential items, such as education and medical expenses, rather than discretionary purchases.
This highlights that a significant portion of use of this service is directed toward essential needs rather than non-essential wants.
Additionally, the report shows that the average value of essential purchases made through BNPL is higher than that of discretionary spending.
This suggests that while consumers are prioritizing their needs, this financial service provides an accessible and affordable way to acquire high-value necessities, including insurance and home goods.
