SME Financing Platform

The customer encountered the following challenges:

• Limited access to traditional financing: Banks often reject SMEs due to complex contracts, long payment cycles, and high collateral requirements. Many SMEs lack credit history, resulting in delayed access to financial support and missed opportunities.
• Regulatory and compliance complexities: Strict SAMA guidelines (KYC, AML) and Sharia-compliant financing (i.e., Murabaha) slow approvals. Any breach poses legal risks and deters investors.
• High investment risk, low transparency: Investors see SMEs as risky due to uncertain repayments and limited risk assessments. Misrepresentation and lack of tracking further erode confidence.
• Scalability and inefficiencies: Limited automation leads to slow processing, high costs, and difficulty handling large volumes. Manual verification delays funding.
• Market adoption and trust issues: Many SMEs are unfamiliar with crowd-lending, while investors require proof of security. Low initial adoption can hinder liquidity and SME-investor matching.

The resulting SME financing platform fully supports purchase order financing (PO financing), based on the Murabaha principles. The main capabilities of the solution:

• PO financing enables small and medium-sized enterprises to obtain funding to fulfill government contracts;
• The crowdlending model allows investors, both individuals and companies, to participate in financing purchase orders;
• The revenue-based financing (RBF) model turns the solution into a product specifically designed for merchants, enabling them to secure financing based on their revenue;
• Flexible financial solutions encompass additional financial products such as invoice discounting and Buy Now, Pay Later (BNPL);
• API integrations support interactions with banking systems, government verification systems (KYC/AML), and payment gateways;
• High-level security features robust mechanisms to protect user data and financial transactions.

With this SME financing platform, we secured and delivered:

• Automated financing: Now, a fully digital workflow lets SMEs submit PO financing requests, backed by automated checks and real-time KYC/AML integration.
• Crowdlending engine: A peer-to-peer model enables multiple investors to finance SMEs, matched by risk and preferences. A shared dashboard ensures transparency.
• Scalable microservices: Modular architecture supports high transaction volumes and efficient data management.
• Flexible financing models: Revenue-based financing and adjustable repayment schedules are tied to revenue streams and contract milestones.
• Regulatory compliance and security: Strong encryption, fraud detection, and Sharia-compliant (Murabaha) financing meet the industry's strict standards.