Tabby secures Saudi finance licenses to expand consumer and SME lending

Tabby secures Saudi consumer and SME finance licences to offer longer-term loans

Tabby has obtained consumer finance and small and medium-sized enterprise (SME) finance licences from the Saudi central bank, enabling the buy-now-pay-later provider to offer longer-term loans for higher-value purchases and working capital to merchants. Eligible customers can finance purchases above SR2,000 (about $532) with limits up to SR50,000 and repayment periods of as many as 12 months, while merchants on Tabby’s platform will gain access to dedicated business financing.

“Since Tabby started, we’ve always wanted to be a holistic financial institution or financial services provider to the customer,” said Abdulaziz Saja, general manager of Tabby Saudi Arabia. “We always knew that the end goal was for Tabby to sort of feel like a banking app.”

The new licences move Tabby beyond the shorter-duration BNPL offerings that were typically capped at SR5,000, which the company says mainly addressed clothing, footwear and lower-cost airline tickets. Saja told reporters that customers who began using Tabby four years ago are now at different life stages and seeking higher limits and longer repayment options: “We’re trying to grow with our customer.”

• Existing consumer offering: previously capped at SR5,000, typically short tenors
• New consumer finance: for purchases above SR2,000, limits up to SR50,000, tenors up to 12 months
• SME finance: working capital and merchant loans targeting smaller e-commerce retailers, including those making less than SR1 million per year
• Scale: Tabby serves more than 25 million registered users and over 65,000 businesses across the GCC, with Saudi Arabia the company’s largest market

Longer payment plans are already being rolled out with several retailers, including Noon, Fitness Time and Almanea, as well as IKEA, Almosafer, Almatar and flynas. Tabby said the plans use a Shariah-compliant Murabaha structure, where the financing cost is disclosed and fixed at the outset, with no compounding or late fees.

Sectors expected to benefit from higher limits include education, travel, healthcare, used cars, furniture and short-term accommodation. Saja highlighted education as a priority: “That’s a segment that we are absolutely going after, for sure. We see a very big need for it. We see a way that we can ease the burden on parents to pay the full amount upfront.” Previously Tabby could finance lower-cost professional courses but not larger tuition payments.

On the SME side, Tabby plans to leverage its merchant-level data—trading history, store activity, product mix and refund records—to underwrite smaller retailers that traditional banks often overlook. “A lot of them make less than a million riyals per year in revenue,” Saja said. “That’s a segment that is really not served by anyone.” He argued Tabby can “score you much better than a bank that’s completely removed from your business is ever able to score you.”

Tabby acknowledges the new products change its risk profile: longer tenors require stronger underwriting and ongoing borrower monitoring. The company plans a phased approach, initially targeting customers with proven repayment histories and gradually increasing caps and tenors. Tabby has piloted merchant-funded 12-month plans in Saudi Arabia and already offers longer-term financing in the UAE, giving it repayment data to inform expansion.

While Saja did not give precise volume forecasts, he suggested the longer tenors and higher limits could materially increase Tabby’s financing book—potentially “maybe 50 percent over what we do today”—and estimated the new product could attract around 10 percent additional new customers on top of its existing base.