Jefferies Financial Group has entered Saudi Arabia’s private credit market for the first time, with a $125m (£94.5m) loan facility to erad, an alternative financing platform for small and medium-sized enterprises (SMEs).
The deal marks the US investment bank’s first asset-backed financing transaction in the Gulf Cooperation Council (GCC), with co-investment from Channel Capital, the alternative asset manager.
The facility also comes as the private credit market in the GCC region has been growing for some time with it now being worth $5bn, according to Moody’s Ratings.
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Jefferies’ facility will support the Riyadh-based platform as it expands its embedded finance solutions across the region. Funding earmarked for Saudi SMEs will be deployed through Competition and Market Authority-licensed direct financing funds managed by Erad Partners Capital.
“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.”
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The facility follows erad securing a $33m debt financing round led by venture credit firm Stride Ventures earlier this year.
“This partnership represents a transformative moment for SME financing in the region,” said co-founder Salem Abu-Hammour. “By embedding financing into supplier and platform relationships, we’re making working capital as accessible as a payment transaction.”
