Jefferies Financial Group has entered Saudi Arabia’s private credit market for the first time, leading a USD125 million financing facility for Riyadh-based SME lender erad.
The deal, arranged in partnership with co-investor Channel Capital, provides an asset-backed and expandable structure designed to help erad scale its lending to small and medium-sized enterprises across the Kingdom.
The agreement reflects rising interest among major global financial institutions seeking to tap into Saudi Arabia’s fast-growing private credit opportunities. By backing erad’s expansion, Jefferies joins the ranks of Wall Street firms moving into the region’s alternative-finance landscape.
Erad has reported rapid growth, achieving more than six-fold year-on-year expansion and receiving over USD700 million in financing requests. Funds dedicated to Saudi SMEs will be deployed through direct-financing vehicles licensed by the Capital Market Authority and managed by Erad Partners Capital.
Erad co-founder Salem Abu-Hammour described the partnership as a milestone for SME finance in the region, saying: “Our partnership with Jefferies represents a transformative moment for SME financing in the region. By embedding financing directly into existing supplier and platform relationships, we’re making working capital as accessible as a payment transaction.”
He added that support from regulators, Jefferies, and Channel Capital underscores the strategic importance of alternative financing in advancing Saudi Arabia’s SME-growth objectives.
SMEs form a cornerstone of economic-diversification efforts across the Gulf, contributing roughly half of regional GDP and employing nearly two-thirds of the workforce. Despite this central role, the sector faces an estimated USD250 billion financing gap, which continues to restrict its growth potential.
“We are proud to work with erad and the Channel team on one of our first asset-backed financing solutions in the GCC,” said Mark Collier, managing director at Jefferies. “Our partnership with erad represents a significant step forward in improving access to capital for GCC SMEs.”
Channel Capital’s chief investment officer Johan Nisser highlighted that the deal builds on seven years of Sharia-compliant, asset-backed financing activity in the region and expressed enthusiasm for supporting erad’s next phase of growth.
Erad plans to expand into multiple sectors and products, including embedded-finance tools that allow suppliers and digital platforms to offer financing at the point of sale. This model is already in use with strategic partners, including suppliers in healthcare, food, and beverage markets in both Saudi Arabia and the UAE.
The transaction marks a significant step in the rapid development of the Kingdom’s private credit market, as both local and international institutions move to meet growing demand for flexible, alternative financing across the Gulf’s SME ecosystem.
