Sukna Capital Launches First Sharia-Compliant Lending Fund for Saudi SMEs

If there’s one thing I’ve seen time and again while reporting for Arageek on businesses across MENA, it’s how start-ups and small companies can’t catch a break from the old-school bank loan hurdles. Well… it looks like something properly different is finally on the table. Sukna Capital, based over in Riyadh, has just been given the green light by Saudi’s Capital Market Authority to set up what they’re calling the Sukna Fund for Direct Financing – and it’s making a bit of a splash.

This is the first open-ended, Sharia-compliant lending fund of its kind in the region. What does that mean in plain English? Institutional backers put their money in, but unlike the sleepy, traditional private credit options, they aren’t stuck for ages – the fund lets investors hop in or out at set points. And right at the core: it gives Saudi SMEs (those scrappy small and medium-sized businesses you always hear about) access to financing without needing to give up a chunk of their own company. No more having to dilute equity just for a cash lifeline.

Here’s something that caught my eye: according to Sukna’s CEO, Fares Bardeesi (a veteran who’s apparently dealt with over $6.5 billion in deals across everything from healthtech to real estate), Saudi SME lending was just SAR 329.23 billion by the third quarter of this year. That’s only 9.1% of total bank credit, which is miles off the ambitious Vision 2030 aim of 15% to 20%. Bardeesi reckons Sukna’s new fund is spot on for plugging this gap, using “institutional, regulator-aligned capital solutions” that actually fit what high-growth businesses need. I reckon that’s not just ambitious, but long overdue.

Backing from Sukna Ventures, the group’s tech investment arm, adds some serious weight. Managing Partner Waleed Alballaa – no stranger to Silicon Valley and the KSA VC scene – is helping steer the investment committee. He’s said that the region’s start-up scene has evolved, but the financial tools are a bit behind the times. So, they’ve designed this fund to offer “the right capital, at the right time, and without the red tape.” No faffing about with endless paperwork – just straightforward, asset-backed funding when companies need it most.

There’s also a bit of a techy twist: Sukna built their own platform to manage loan approvals, risk, monitoring and investor reporting, so both the investors and the start-ups get proper transparency and scalability. On the flip side, scaling innovation always comes with teething problems – but with strong backing and specialist guidance, this approach might just set a new standard.

For those keeping an eye on fintech across MENA, it’s worth noting that TraiCon Events is gearing up for a summit looking into everything from open banking and blockchain to financial inclusion. Plus, recent investment moves – like Equivator putting SAR 30 million into Dubai-based Related – all point to a wider buzz around new digital financing and payment solutions for brands.

It’s always heartening when we see bold new ideas move out of the pitch deck and into the real world, especially if it means giving startups the kind of leg-up that helps transform great ideas into actual impact. Here’s hoping this latest innovation from Sukna lights the way for more growth across the region. If you ask me, it’s definately a welcome change.

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