In recent years, the Kingdom of Saudi Arabia has implemented large scale regulatory reforms, including the Civil Transactions Law, Bankruptcy Law, Public-Private Partnership Program, and the Government Tenders and Procurement Law. These reforms were designed to enhance the Kingdom’s diversification efforts and attract international business – they have also propelled the country to rank 16^th globally on the IMD World Competitive index. 

Saudi Arabia’s growth momentum and economic stability are likely to continue to have a profound impact on the financing market. We take a closer look at a few expected trends within the evolving lending market.

International investors

Historically, the interest in Saudi borrowing has been predominantly domestic or from the Gulf Cooperation Council (GCC) countries. However, we expect to see a shift in 2025, with a surge in interest from international markets. Several factors contribute to this change. 

Saudi Arabia's ambitious Vision 2030 plan, which aims to diversify the economy and reduce dependence on oil, has attracted global investors as companies seek to leverage the Kingdom's increasing economic opportunities. The growing confidence in Saudi Arabia’s economic stability and growth prospects was demonstrated in the Kingdom's recent issuance of a $12 billion bond which garnered substantial interest from international investors, with bids exceeding $30 billion. As a result, we anticipate a notable increase in international deals, moving beyond the traditional domestic and regional appetite.

Diversification of borrowers

With Saudi Arabia in delivery-mode as the giga projects come to life, we expect corporate-lending to remain buoyant. In addition, Saudi Arabia's sovereign credit rating upgrades by major rating agencies have positively impacted the credit ratings of domestic companies. As a result, more companies are achieving investment-grade status, which is expected to boost the lending market and expand the pool of borrowers beyond the traditional sovereign wealth funds. Sectors that are likely to drive this growth include renewable energy, construction, infrastructure and tourism. 

A promising future

Saudi Arabia's recent regulatory reforms and ambitious Vision 2030 plan have paved the way for a dynamic and evolving lending market. The Kingdom's economic stability and growth momentum are drawing significant international interest, moving beyond the traditional domestic and GCC focus. We can also expect a notable increase in investment-grade borrowers and international deals. 

The future of Saudi Arabia's lending market looks promising, with a more diversified and globally integrated financial landscape on the horizon.