Growth debt is the answer to GCC financing gap, PFG says

Venture capital ecosystems are rapidly maturing in the GCC, but some argue companies still face structural funding gaps in debt markets that could hinder growth. The SME financing gap in Saudi has been estimated at some SAR 300 bn.

We spoke to Armineh Baghoomian, Managing Director and Head of EMEA at Partners for Growth. The global investment firm —- specializing in structured growth debt —- has been investing in the GCC for over 5 years now, championing growth debt as the way to finance rapidly-growing companies without affecting their ownership structures. Edited excerpts from our conversation:

The SME financing gap we’re seeing today in Saudi Arabia underscores the growing demand for alternative funding models, financing growth without relying solely on equity. It also demonstrates the need to expand access to debt financing for companies that may not yet be eligible for traditional commercial lending solutions.

SMEs are less likely than larger businesses to be able to obtain bank loans globally — a trend exaggerated in the GCC, where credit is heavily concentrated in large corporations, government-backed entities, or family groups. This means companies operating in capital-intensive sectors — such as fintech, SaaS, and digital health — often struggle to access conventional debt, despite their potential.

We see high potential in various fintech solutions – from BNPL to remittances. Powerful regional factors drive our optimism: strong regulatory support for digital finance, a young, tech-savvy population, rapid digital transformation, and healthy and increasing demand for scalable, equity-efficient financing. The GCC is home to a generation of entrepreneurs who possess the vision and ambition to transform regional ecosystems and economies. The key to unlocking their potential is to ensure these founders receive the right kind of capital.

That’s where growth debt comes in. Growth debt provides a flexible alternative, offering minimally dilutive capital that enables these high-growth companies to invest in product development, hiring, M&A, geographic expansions, and any other pillars of their long-term growth strategy — without significantly diluting ownership. For investors, meanwhile, growth debt offers a lower-risk avenue to access innovation and tech opportunities, combined with consistent returns.

Growth debt was virtually unknown in the GCC five years ago. Today, it is becoming a vital part of the region’s financial landscape. We have already committed over USD 400 mn to high-growth companies across the GCC, and we see significant room to expand further. Beyond capital, we are helping to shape the regulatory landscape to normalize growth debt as a mainstream financing tool in the region.

We design growth debt to match where a company is and where it’s headed. It sits alongside other financing sources, offering a minimally dilutive option that allows high-growth companies to scale while retaining control. This is especially important in the GCC, where there is a structural funding gap, despite the region’s rapidly maturing venture equity ecosystem. We make sure to apply our model while adapting to local dynamics: we were among the first to offer Sharia-compliant structures — an important enabler in Saudi Arabia and the wider region — and continue to design bespoke facilities for ambitious, high-growth companies.

These solutions are not one-size-fits-all. They are built in close partnership with founders, and enriched by strategic partnerships with leading institutions – including Jada Fund of Funds and Saudi Venture Capital Company (SVC). SVC and Jada approached us because we had already been actively deploying in the region and brought a demonstrable track record, measured in decades, of empowering high-growth companies to succeed.

PFG has so far committed to 15 companies across the GCC, spanning fintech, proptech, e-commerce, logistics, SaaS, martech, and more. From BNPL giant Tabby to digital freight platform TruKKer — our first GCC investment — to auto ecommerce business Syarah as well as payroll and HR management system Bayzat, we have demonstrated that growth debt is not just funding; it is strategic capital designed to scale businesses sustainably while preserving ownership.