Programme Status: Active

For full programme analysis, see the Financial Sector Development Program. Related coverage: investment analysis, SME growth, regulation.

Key Metrics

Recent Milestones

• Tadawul market capitalisation surpassed SAR 10 trillion, exceeding the programme target ahead of schedule, driven by Aramco’s listing and growing international investor participation.
• MSCI Emerging Markets and FTSE Russell index inclusions completed, channelling billions in passive investment flows into Saudi equities and validating market infrastructure.
• Fintech ecosystem reached over 230 licensed entities spanning payments, lending, insurtech, and open banking, with regulatory sandbox approvals accelerating innovation.
• Open banking framework launched by SAMA, enabling data sharing between financial institutions and third-party providers for enhanced consumer services.
• Mortgage market deepened substantially, with outstanding mortgage balances exceeding SAR 500 billion and multiple lenders competing for housing finance business.
• Saudi Exchange Group restructured to support derivatives trading, REIT listings, and ETF expansion, broadening investment product availability.
• Debt capital markets grew significantly with major sovereign and corporate sukuk issuances, establishing Saudi Arabia as the region’s leading fixed-income market.

Delivery Assessment

The Financial Sector Development Program has been one of the stronger performers in the Vision 2030 portfolio, particularly in capital markets development and fintech ecosystem building. The Tadawul’s capitalisation exceeding SAR 10 trillion ahead of target is a headline achievement, though it is heavily influenced by Aramco’s weighting and oil-price-driven valuation changes.

The fintech ecosystem presents a nuanced picture. While the absolute count of licensed entities (approximately 230) falls short of the 525-company target, the quality and economic contribution of active fintechs has been meaningful. Payment companies including STC Pay, Tamara, and Tabby have achieved significant transaction volumes and international recognition. Digital lending, insurance, and wealth management platforms are growing, though the pace of company formation has not matched the ambitious headcount target. The regulatory environment, led by SAMA’s progressive approach to sandboxes and licensing, is broadly recognised as supportive.

Cashless transaction adoption has grown rapidly, from approximately 36% at baseline to an estimated 62%, driven by NFC payment infrastructure, QR code payments, and the behavioural shift accelerated by COVID-19. The 70% target is within reach but requires continued expansion into segments where cash remains dominant, including smaller retail transactions and payments in smaller cities.

The mortgage market transformation is a particular success. From a near-zero base of residential mortgage lending in 2016, the market has grown to over SAR 500 billion in outstanding balances, supporting the Housing Program’s homeownership achievements. Mortgage-backed securitisation, introduced through the Saudi Real Estate Refinance Company, has added secondary market depth.

Outlook

The FSDP’s remaining agenda focuses on deepening financial sector GDP contribution toward 10%, which requires continued growth in lending, insurance, asset management, and capital markets services. The insurance sector, historically underdeveloped, represents a significant growth opportunity as mandatory health insurance coverage expands and motor insurance deepens. The asset management industry, growing alongside PIF’s domestic investment ecosystem, is another contributor. The programme’s success in the final years depends on translating the regulatory and infrastructure foundations into sustained financial services revenue growth.