Redefining SME Financing Through Data and Technology
Redefining SME Financing in MENA
Access to capital remains one of the most pressing challenges for small and medium-sized enterprises (SMEs) in the MENA region. Despite the rapid digitalization of commerce and services, financing models have failed to keep pace, leaving many ambitious founders and business owners underserved by rigid, traditional financial institutions.
erad emerged to change that. What first caught our attention wasn't just their product; it was their philosophy: build for founders, not just for credit scores. From the outset, co-founders Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Almeheini, and Youssef Said weren’t looking to iterate on the system. They were rethinking it entirely, with a deep empathy for the everyday entrepreneur and a long-term vision for a financial infrastructure that enables, not hinders, growth.
A Founder-Led Shift in Perspective
The core idea behind Erad is impactful but straightforward: many founders in the MENA region, especially those in traditional or rapidly growing digital sectors, lack access to the type of capital that suits their business models. Traditional banks often require collateral and fixed repayment schedules that do not match the cash flow realities of SMEs.
The founders were intimately familiar with this challenge. In response, they designed flexible capital products that grow with the business - offering flexible short-term Shariah Compliant financing products, allowing founders to access financing products that what work best for their stage and risk profile. It's not just a new product, it's a new approach to underwriting, rooted in understanding operational data rather than relying on outdated risk models.
“We’re building the financial operating system for SMEs in the region,” Salem says. “Financing is just the beginning. We're building tools to help businesses manage liquidity, access working capital, and scale sustainably.”
Challenging Convention, Scaling with Precision
From day one, erad had its eyes on Saudi Arabia - home to over 1.2 million SMEs, a sector that contributes nearly 30% of the Kingdom’s GDP, and a government with ambitious targets to raise that number to 35% by 2030. Yet despite this growth target, access to financing remains a significant barrier. Traditional banks typically serve only a fraction of these businesses, and non-dilutive short-term financing options are virtually nonexistent.
This is the gap erad set out to fill.
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However, like many FinTechs, they had to navigate early regulatory requirements in KSA, which meant they couldn’t launch there immediately. Instead, they focused on the UAE as an interim market - testing, iterating, and building a product foundation in a more accessible environment while working behind the scenes to secure the regulatory approvals needed in Saudi Arabia.
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That patience paid off.
Once licensed, erad shifted its focus back to KSA, scaling rapidly in the region it had always intended to serve. The move validated both their long-term strategy and their ability to navigate complex regulatory environments while staying true to their mission.
Their model, centered around providing short-term financing in 48 hours, offered a flexible alternative to traditional bank loans. And in a market where banks meet less than 10% of SME financing needs, the demand for such options is immense.
What We Saw in Erad
At Khwarizmi Ventures, we don’t just back ideas, we back founders who have deep insight, relentless discipline, and the willingness to question convention. With erad, we saw all three.
We met the founders in early 2022, before traction, before Saudi expansion, and before their go-to-market strategy was entirely in place. But what they had was far more valuable: a deep understanding of the problem, a sharp vision for solving it, and the humility to evolve when needed.
Since then, we’ve supported their journey by providing early belief, regional context, and introductions, including connecting them with early debt partners and financial institutions to support their capital stack. However, we’ve always viewed our role as partners, not guides - there when needed, stepping back when not.
“Khwarizmi gave us the space to build, while being present at pivotal moments,” says Salem. “They listened, supported tough decisions, and felt like an extension of our team. That kind of alignment is rare.”
The Road Ahead
Today, erad continues to evolve. With a growing customer base, expanding credit partnerships, and a platform that’s getting smarter with every cycle, they’re building the financial rails for the next generation of MENA businesses. Their focus isn’t just speed; it’s durability. They're not chasing headlines; they’re earning trust.
Recently, Erad has raised $33 million in debt financing from Stride Ventures, India’s largest lender, to expand its operations in Saudi Arabia and the GCC market. Since its launch, Erad has provided over $50 million in SME funding and has received more than $532 million in funding requests from regional well-known brands.
Their long-term vision? A full-stack financial operating system for SMEs in the region and beyond - starting with capital but eventually encompassing all the tools founders need to manage their economic lives.At Khwarizmi Ventures, we’re proud to walk this journey with erad - not just as investors, but as partners aligned on purpose, philosophy, and the belief that founders deserve better financing tools to power their ambition.
