Saudi Arabia Factoring Market

Market Overview:

Saudi Arabia factoring market size reached USD 37,846.8 Million in 2024. The market is projected to reach USD 51,384.3 Million by 2033, exhibiting a growth rate (CAGR) of 3.5% during 2025-2033. The growing focus among businesses to use strategic financial tools that can navigate a rapidly evolving economic landscape across the country is primarily fueling the Saudi Arabia factoring market share.

Factoring is a financial arrangement where a company sells its accounts receivable to an external entity at a discounted price. This involves various forms, such as recourse, non-recourse, invoice, and reverse factoring. The application of factoring is widespread across manufacturing, retail, healthcare, logistics, technology, and construction industries. Its benefits include the prompt availability of cash, streamlined accounting processes, decreased efforts in collections, risk mitigation, improved financial statements, and support for scalability. Additionally, factoring improves financial ratios, provides credit risk analysis, and enables businesses to concentrate on their primary operations.

Saudi Arabia Factoring Market Trends:

Increasing trade activities

Rising trade activities are fueling the market growth. As domestic and international trade volumes are growing, businesses are facing delays in receiving payments, which can strain cash flow. According to the CEIC, in December 2024, Saudi Arabia's trade balance registered a surplus of USD 73.3 Billion. Factoring helps companies manage this challenge by converting their receivables into immediate working capital. Importers and exporters, in particular, benefit from factoring services to bridge payment gaps and maintain smooth operations. With the expansion of trade across sectors, such as manufacturing, more businesses are seeking short-term credit options to meet their financial needs. Factoring also reduces the credit risk associated with trading partners, making it a practical choice for companies dealing with large or repeated orders.

Growing utilization of digital platforms

Rising adoption of digital platforms is impelling the market growth. With increasing internet penetration in Saudi Arabia, more firms are employing digital platforms. According to industry reports, the country had 33.9 Million people accessing the internet at the beginning of 2025. Digital platforms simplify the management of invoices, automate verification, and reduce paperwork, allowing companies to access funds more quickly. Small and medium-sized enterprises (SMEs) are gaining considerable advantages, as they can reach factoring services without needing a strong banking relationship. These platforms also offer real-time tracking of transactions, improving trust and efficiency between clients and factors. Integration with accounting further streamlines operations, minimizing errors and administrative burdens. Digital solutions also enhance risk assessment and credit checks, enabling faster approvals and better decision-making. By lowering entry barriers and improving service quality, digital platforms aid in expanding the reach of factoring services across industries.

Rising adoption of supply chain financing

The growing utilization of supply chain financing is encouraging businesses to use receivables-based funding solutions to maintain smooth operations. As companies aim to strengthen supplier relationships and optimize working capital, supply chain financing is becoming a preferred tool, allowing both buyers and suppliers to benefit from improved cash flow. Factoring fits into this model by enabling suppliers to receive early payments on invoices, while buyers can extend payment terms without disrupting the supply chain. With increased collaboration between financial institutions and companies, supply chain financing solutions that include factoring are becoming more accessible and efficient. As more retail businesses are integrating supply chain finance into their operations, the demand for factoring services is rising. As per the IMARC Group, the Saudi Arabia retail market size was valued at USD 282.2 Billion in 2024.

Growth Drivers of Saudi Arabia Factoring Market:

Thriving non-oil sectors under Saudi Vision 2030

The expansion of non-oil sectors under Saudi Vision 2030 is propelling the market growth. As the country is reducing its reliance on oil and investing in sectors like manufacturing, tourism, healthcare, logistics, and technology, more businesses are emerging with varying capital needs. Factoring is becoming an attractive option for these enterprises to manage cash flow, especially small and medium-sized companies that may not have easy access to traditional bank loans. The focus on private sector development under Vision 2030 is further boosting entrepreneurship and industrial activity, catalyzing the demand for receivables financing. Government support and reforms are also creating a favorable environment for financial innovations and service broadening. As more non-oil businesses are adopting modern financial tools, factoring plays an important role in supporting their operations and sustaining growth.

Growing demand for short-term financing options

Rising demand for short-term financing options is offering a favorable market outlook. Many companies are facing delays in receiving payments from clients, which is creating gaps in cash flow. Factoring helps address this by converting outstanding invoices into instant cash, allowing businesses to manage expenses, pay suppliers, and continue operations without interruption. In a competitive and fast-paced market environment, short-term financing is becoming essential for maintaining financial stability and responding to new opportunities. Unlike traditional loans, factoring requires less collateral and offers faster approval, making it a preferred choice for many businesses. As more companies prioritize liquidity and agility in financial planning, the appeal of short-term financing through factoring is increasing.

Increasing industry collaborations

Industry collaborations are bringing together financial institutions, fintech companies, and business sectors to create more accessible and efficient financing solutions. Partnerships between banks and technology providers help develop advanced platforms that simplify the factoring process, making it faster and more user-friendly for businesses. Collaborations are also leading to the creation of tailored factoring services that address the unique needs of specific industries, such as construction, manufacturing, and retail. Joint initiatives aid in promoting greater awareness of factoring benefits and educating businesses on how to leverage these services effectively. Industry alliances are contributing to setting common standards and improving transparency, which is building trust in the system. Additionally, shared data and resources enhance risk assessment and credit evaluation, making factoring more secure and reliable.

Saudi Arabia Factoring Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for ​2025-2033​. Our report has categorized the market based on type, organization size, and application.

Type Insights:

• International
• Domestic

The report has provided a detailed breakup and analysis of the market based on the type. This includes international and domestic.

Organization Size Insights:

• Small and Medium Enterprises
• Large Enterprises

A detailed breakup and analysis of the market based on the organization size have also been provided in the report. This includes small and medium enterprises and large enterprises.

Application Insights:

• Transportation
• Healthcare
• Construction
• Manufacturing
• Others

The report has provided a detailed breakup and analysis of the market based on the application. This includes transportation, healthcare, construction, manufacturing, and others.

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

The report has also provided a comprehensive analysis of all the major regional markets, which include Northern and Central Region, Western Region, Eastern Region, and Southern Region.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Saudi Arabia Factoring Market News:

• February 2025: Saudi Central Bank granted approval to 4 additional fintech startups for Regulatory Sandbox. It fostered innovation by welcoming new participants in open banking, peer-to-peer lending, and MSME factoring. The Regulatory Sandbox enabled these startups to evaluate their solutions within a regulated setting.
• January 2025: The Spark Education Platform (SEP), operated by EFG Hermes, revealed final agreements to secure a majority stake in Qimam El Hayat International School situated in Riyadh. SEP aimed to begin the next stage of the school’s growth by relocating to a new, specially designed campus, which would increase the school's capacity by more than 50%. EFG Finance emerged as a swiftly growing NBFI platform, incorporating Tanmeyah, a microfinance organization, and EFG Corp-Solutions, which provided leasing and factoring services.
• August 2024: PostEx was set to introduce financial and logistics services in the UAE and Saudi Arabia. PostEx offered a combined solution that integrated receivables factoring with courier services, delivering immediate payment for invoice amounts to e-commerce businesses.

Saudi Arabia Factoring Market Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia factoring market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia factoring market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia factoring industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.