Issuing debt instruments via crowdfunding ‘positive’ step: Fitch

Fitch Ratings said, in a statement that the Capital Market Authority’s (CMA) approval to offer debt instruments in the sukuk and debt market on crowdfunding platforms by licensed financial market institutions is a positive step towards deepening the sukuk and debt market in Saudi Arabia.
 

The approved framework allows companies holding Fintech experimental licenses, or those interested in providing this service, to obtain the appropriate license to operate as a financial market institution. This could lead to an expansion of issuances and broader access for retail investors within the scope of licensed capital market activities, it added.
 

Furthermore, the momentum during the trial phase was positive — the volume of sukuk issued through this model more than doubled, reaching about SAR 3.4 billion in 2024 compared to SAR 1.5 billion in 2023, while the number of licenses rose from 14 to 17. However, retail investor participation in domestic government issuances remained below 1% as of the end of H1 2025, according to the ratings agency.
 

Fitch also noted that sustainable growth will depend on implementation factors such as platform governance, investor suitability, disclosure quality, Sharia governance of sukuk, cybersecurity, and operational resilience. It added that concurrent regulatory developments — including governance, data protection, fair competition, cybersecurity, and prudential controls — will be important as fintech models expand, complementing the CMA’s framework.
 

Strategically, allowing licensed institutions to act as intermediaries in crowdfunding aims to diversify and support the sustainability of corporate funding sources and broaden investor access, in line with the CMA’s objectives to deepen the debt market and enhance its attractiveness to issuers and investors. The amendments, aligned to the Rules on the Offer of Securities and Continuing Obligations, Special Purpose Entity Rules, and Capital Market Institutions Regulations, indicate a coordinated approach that supports the Authority’s goals.