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The rise of debt based crowdfunding platforms means there’s a ton of options for both investors and borrowers. The platforms may look similar, but the nuances in how they operate
can help you earn more as an investor and pay less as a borrower, so it’s important to study the details.
Don’t have the time? Below we’ve broken down the key points you need to know for navigating Funding Souq and Sukuk Capital, both of which are shariah-compliant crowdfunding platforms that specialize in financing for SMEs in Saudi Arabia (Funding Souq also operates in the UAE). Take a look before making your next crowdfunding decision.
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Platform feature
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Funding Souq |
Sukuk Capital |
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As an investor, what will I be investing in?
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- SMEs apply to Funding Souq to fulfill their growth plans via working capital finance or fixed asset finance. |
- To understand the difference between Sukuk and traditional bonds, read our blog here.
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- Funding Souq is the only debt based crowdfunding platform in the Middle East that is regulated in 2 countries – Saudi Arabia & the UAE.
- Funding Souq’s KSA platform can onboard only Saudi nationals and residents as per the Saudi Central Bank regulation.
- Funding Souq’s Global (UAE) platform can onboard nearly all nationalities, allowing almost anyone to invest in UAE-based businesses.
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The minimum investment is SAR / AED 1,000, which approximates to $270. |
The minimum investment is SAR 1,000 |
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In Saudi Arabia: -Retail investors can invest up to 200,000 per year. However, each investor’s commitment shouldn’t exceed 25% of the requested amount by the business with a maximum cap of SAR 50,0000. For professional (eligible investors) no limits apply.
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Investors can invest a maximum of SAR 100,000 in a calendar year and SAR 20,000 per one invevesment opportunity. |
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- Investors can expect a net yield of up to 15% and Internal Rate of Return (IRR) of up to 30% as monthly repayments allow for the returns to compound. - To understand the difference between yield and IRR read our blog here. |
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Repayments can be quarterly, semi-annually, annually or at the end of the investment period. However, it is important to note that these coupons only comprise of the profit amount rather than the profit and principal. This decreases the compounding ability. |
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What are the fees for investors?
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The returns displayed on the platform are net of any applicable fees.
The presented return is what you should expect to earn. |
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Does the platform have an Auto-Investment option?
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Yes. Once enabled, the Auto-Invest system will automatically allocate your deposited funds or repayments into the marketplace based on your selected investment strategy |
No |
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Platform feature
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Funding Souq |
Sukuk Capital |
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- Working capital loans that range from 3 to 12 months in duration.
- Fixed asset loans that extend up to 24 months. |
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- Creditworthy SMEs in Saudi Arabia or the UAE with a minimum of two years of trading.
- The business should have at least SAR/AED 2 million of revenue and be profitable or on path to profitability.
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What is the maximum financing duration? |
Short term financing for 3-24 months. |
Long term financing up-to 10 years |
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What level of financing is available?
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Typically between SAR / AED 100,000 to 1,000,000, but up to a maximum of SAR/AED 7.5 million. |
A company can receive up to 30 million SAR in financing |
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What are the fees for borrowers?
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Administration fees: 2% to 3%
Monthly profit rate: 1% to 1.5% |
Administration fees: 3-5% |
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How long does it take to get a funding decision?
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Within 3 working days from when the submission is completed. |
Financing offers are typically sent within 3 business days from when your submission is completed. |
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Are multiple funding facilities permitted? |
Yes. | Yes. |
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Are all finance and investment operations sharia-compliant? |
Yes,you can find out more details about our Shariah Certficate |
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Disclamer:
Funding Souq KSA is regulated by the Saudi Central Bank (SAMA). This communication is not directed at or intended to be acted upon by any Person in the DIFC.. Funding Souq operates Islamic Window, pursuant to which it's Shariah Supervisory Board (SSB) has reviewed the Shariah Compliant structure, to which this marketing material relates. SSB Members are from Safwa Shariah Advisory Pvt. Ltd., whose details are available on Funding Souq website. SME Financing carries a potential default risk which may result in loss of all or part of your investment, incur costs or delays in receiving payments.
