Saudi debt instrument issuance via crowdfunding ‘positive’ step: Fitch

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The Capital Market Authority's (CMA) approval for licensed financial market institutions to offer debt instruments in the sukuk and debt market on crowdfunding platforms is a positive step toward expanding the sukuk and debt market in Saudi Arabia, according to a statement from Fitch Ratings.

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. It further stated that this might result in more issuances and wider access for individual investors within the parameters of authorized capital market operations.

Additionally, there was positive momentum during the trial phase; 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, individual investor participation in domestic government issuance remained below 1% as of H1 2025, according to the rating 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.

Allowing licensed institutions to serve as crowdfunding intermediaries is a strategic move that supports the CMA's goals of deepening the debt market and increasing its appeal to issuers and investors while also diversifying and bolstering the sustainability of corporate funding sources and expanding investor access. 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.