One of the most vanilla financial instruments in MENA+ is critical to the region’s booming consumer and small-business finance industries

The UAE and Saudi Arabia, the two Gulf real estate and financial services heavyweights, are writing new securitization rulebooks this summer. Tadawul has drafted amendments out for consultation until 14 June that would give securitization and asset-backed issuances their own framework — splitting rules on debt offerings from those for equities and adding disclosure requirements tailored to structured deals. The UAE, meanwhile, has the regulatory framework on the books for publicly listed securitized issuances, but the market remains embryonic. A rule change could bring the asset class to life from Abu Dhabi to Dubai and beyond.

The market both are of them are trying to build already exists a two- or three-hour flight to the west: Egypt is home to the region’s deepest and most sophisticated market for securitized debt — and it has recently become the first in MENA+ to confront what happens when the product really takes off.

Why it matters: Securitization is the funding engine of non-banking financial institutions (NBFIs) — the consumer lenders, leasing firms, microfinance players, and fintechs that reach the borrowers to whom banks are less likely to lend. How the Gulf sets up these frameworks will shape market-wide access to liquidity for consumers and small businesses, constrain how the fintech and consumer-credit booms get funded, and determine whether the next wave of capital comes from local banks, global houses like JPMorgan and Goldman, or the private credit funds circling the region. Egypt’s decade of experience — including its current regulatory correction — is the closest thing we have to a regional field manual.

SOUND SMART- Securitization turns buckets of small, illiquid loans into a single tradable security. An issuer bundles car loans, installment plans, or lease receivables into a pool, then usually sells it to an investor through a special purpose vehicle (SPV). The SPV issues bonds or sukuk backed by the monthly payments. The issuer gets cash today instead of collecting for years, giving it the option of putting that liquidity back to work in the form of new lending. Hatem Samir, CEO of GlobalCorp, one of the top NBFI platforms in Egypt and a pioneer of the industry, previously told our Egypt desk that securitization is one of the most efficient tools for “offloading and recycling bank debt.”

(Egypt’s NBFI sector is so attractive that GlobalCorp’s anchor investors have — despite the ongoing war in the Gulf — kept alive alive an exit process that has attracted significant interest from regional players including at least one UAE financial institution, as we reported last month.)

Egypt got here first

Egypt was the first of the Big Three regional markets to grow a sophisticated non-bank financial services industry. Contact, now a diversified EGX-listed platform, was the early pioneer, pushing into consumer finance with car loans. The tipping point for the industry came when EFG Hermes (the biggest homegrown investment bank in the region — also EGX-listed) launched a leasing business in 2015, targeting SMEs as well as large companies impatient with the notoriously slow turnaround times of most Egyptian banks.

EFG Hermes saw the push into consumer and corporate lending as a great way to both cross-sell to existing clients and smooth-out its earnings — investment banking is, by nature, a feast-or-famine game. Its competitors loved what they saw and launched ventures of their own in a few short years. Everyone from real estate players to car distributors and home electronics retailers followed suit.

Investment bankers may have pioneered the Egyptian industry, but they didn’t have it to themselves for long: The same startup boom that aimed to “disrupt” everything from logistics to food came for finance, too, and no venture-backed industry was hotter than fintech.

Any company pushing into consumer finance quickly finds that its own equity is a really inefficient (and expensive) way of financing a loan book. With banks reticent to provide working capital, most companies turned to securitization, which soon morphed from a cottage industry into a mainstay that keeps armies of lawyers and consultants employed.

Who buys securitized offerings? Mostly those slow, risk-averse banks, which are more than happy to buy portfolios after someone else does the dirty work of building quality portfolios.

Securitization became even more important when the end of “free money” saw venture funding dry up. Securitization is at the heart of the 57% y-o-y growth of Egypt’s consumer finance market posted in 2025, closing the year with EGP 96.3 bn on the books, with some 48 licensed companies having extended credit to more than 10.8 mn customers. Financing extended to MSMEs and microfinance clients rose 24% y-o-y to EGP 106.9 bn, though the number of beneficiaries edged down slightly to 3.6 mn. And total financed portfolios across all NBFI verticals closed at c. EGP 417 bn for the year, according to the Financial Regulatory Authority (FRA), which regulates the industry.

A tool for growth: “Securitization was once used primarily to optimize the balance sheet,” Imane Raouf, partner and lead securitization expert at Matouk Bassiouny, tells EnterpriseAM. says. “Now, it plays an important role in improving liquidity, boosting revenues, and managing regulatory ratios. It has evolved into a strategic tool for growth.”

The scale of issuances tell the story: From fintech player Valu, a unit of EFG Holding and itself now listed on the EGX, to EFG Corp-Solutions, Contact, GlobalCorp, GB Lease, units of fintech unicorn MNT-Halan, and real estate giant Talaat Moustafa Group, every blue-chip NBFI in Egypt has offloaded portfolios with bns and bns of EGP using the tool. The asset class now draws interest not just from Egyptian banks, but from global investors.

The FRA has spent more than a decade constantly tweaking and updating its regulatory framework in a bid to keep pace with companies that are both innovating and hungrily borrowing structures and ideas from markets around the world. From SPVs and asset transfers to disclosure and issuance procedures, it had to build the airplane while flying it.

“One of the strengths of the Egyptian framework is that it has evolved with the market rather than remaining static,” Raouf says. As fintech and consumer finance created new asset classes, she notes, the rules adapted to accommodate them — “allowing securitization to remain a relevant funding mechanism for evolving business models while maintaining appropriate safeguards.”

In the process, the FRA has gone from being the stodgy regulator of the Egyptian Exchange (yes, we’re oversimplifying — but not by much) to the overseer of a massive shadow lending pool that exists outside the banking system, but that counts on banks as its biggest “offtakers.”

Now, the Central Bank of Egypt is pushing back.

Egypt’s regulatory correction

By most estimates, domestic banks buy about 90% of the paper issued by Egyptian NBFIs, and the Central Bank of Egypt (CBE) has grown wary of how much bank liquidity the sector is absorbing. The result? It moved to cap banks’ exposure to securitized portfolios at 5% of a bank’s given loan portfolio, limit each one’s exposure to any single leasing company to 1%, and tightened oversight of banks' NBFI-related transactions — setting up a jurisdictional tug-of-war with the FRA.

One of Egypt’s most prominent bankers lit a match a few weeks back. Hisham Ezz Al-Arab leads CIB, the EGX-listed bank loved by foreign investors as a proxy for the wider Egyptian economy. It’s also the largest bank in the country not owned by the state.

Ezz Al-Arab is best known to normals as the most-visible Egyptian banker onX, where he regularly addresses customer complaints and jousts with critics. Ezz Al-Arab kicked over an ant hill when he recently warned that “a small spark in the non-bank financial sector could shake the entire economy,” setting off a brouhaha that roared to life on social media and the nation’s still-influential nighttime talk shows.

The central bank had handed down in April measures to tighten how commercial banks finance the NBFI industry, and parliament has since joined the fray, with lawmakers demanding hearings on the “unregulated expansion” of consumer finance firms. After Ezz Al-Arab’s remarks, the Financial Regulatory Authority moved to publicly name NBFI violators, setting up a registry of individuals and companies in breach of regulations and threatening to pull licenses.

Pundits are divided about the central bank’s motivations — whether it’s just trying to tamp-down risk, or whether it’s also aiming to curtail inflation.

The regulatory friction could be read as a feature of a maturing market. “This sector has grown significantly over the last five years. The volume of transactions and issuances we witnessed was massive, with a broader range of asset classes being securitized. The recent rate-cutting cycle has been a positive driver for debt capital markets,” Raouf says. “As inflation has moderated, lower interest rates have improved financing conditions for issuers while allowing investors to lock in attractive yields, supporting strong demand for debt instruments.”

So, where do Saudi and the UAE stand?

Saudi is building the regulatory base

Tadawul’s draft framework is about one thing: letting investors take risk on a defined asset pool rather than the issuer — which Fitch’s Bashar Al Natoor calls the precondition for a genuine asset-backed sukuk market. It also builds on last year’s overhaul of special purpose vehicles by separating the framework regulating securitization SPVs from other debt issuances.

Why now? As the Kingdom recalibrates its gigaproject ambitions and trims public spending, securitization could help local banks free up liquidity for other purposes, and the need is perhaps most acute in the mortgage industry. (There’s no meaningful market for mortgage-backed securities in Egypt — the country’s sky-high interest rates have choked the mortgage market in its crib.)

“The scale of [Saudi’s] ambition will require significant foreign funding, and securitization is a sensible strategic tool that they seem to have recognized,” Chris Taylor, CEO of UAE consumer lender Deem Finance, tells us.

The ball is rolling now: The PIF’s Saudi Real Estate Refinance Company has acquired two pools of mortgages worth SAR 10 bn from AlRajhi Bank. But most Saudi transactions are currently taking place almost entirely through private placements. The next step is to expand the securitization market to allow the securities to be traded on Tadawul

The UAE is doing deals in the gaps

There’s a wrinkle in the UAE: Its statutory true-sale framework doesn’t cover private placements, which account for most of the market activity. The country’s 2023 securitization rules formally recognize the true-sale framework, but only for listed transactions. Private placements, which make up the bulk of the market currently, fall outside it and lean on the 2021 Factoring Law and deal documentation instead.

SOUND SMART-The true-sale concept means the receivables have legally and irrevocably left the originator’s balance sheet — sold outright to the SPV, not pledged as collateral. If the lender later goes bust, its creditors can’t claw the assets back and bondholders keep getting paid from the pool. Agreements are negotiated on a case-by-case basis, and each needs approval from the Central Bank of the UAE.

True sale — getting the assets off the originator’s balance sheet — is key. The pool of future payments on the receivables needs to be out of the reach of creditors if the company goes belly-up. That’s what lets an investor price the paper on the collection data in the pool rather than the issuer’s creditworthiness — and it’s why the due diligence on a securitization is brutal.

Deem’s UDS 400 mn deal with JPMorgan late last year shows how it’s done right now: Deem bundled credit cards, personal loans, and SME loans into a single SPV — a multi-asset structure designed to give one of the UAE’s first deals enough scale and flexibility. JPMorgan bought the issuance after the deal (formally a senior revolving facility) got central bank approval. “We have sold the assets into an SPV, so it is a true sale. There is no recourse for those assets back to Deem,” Taylor tells us. The structure is a classic waterfall: JPMorgan holds the senior tranche and gets repaid first, and Deem retains the junior tranche. “You create access to an evergreen funding structure that eliminates the mismatch between your assets and liabilities. Instead of borrowing money, you are effectively selling the asset,” Taylor explains.

“The level of diligence that JPMorgan went through with us was absolutely intense,” Taylor says.

Deem isn’t alone. Quantix, a unit of AstraTech, raised USD 500 mn in an asset-backed securitization last year, while Beehive raised AED 500 mn in structured finance from Goldman Sachs and Magellan Capital.

Raouf notes that the UAE’s regulations are “very similar to the Egyptian securitization framework” with true-sale assignment, the SPV structure, and off-balance-sheet treatment. The need to go to the central bank and get approvals on a case-by-case basis when you’re doing a private placement is a significant obstacle — and one industry players we spoke with hope changes soon.

Domestic banks are nowhere to be seen: Bulge bracket banks including Citi, Goldman, and JPM account for the lion’s share of the deals we reviewed for this story, with domestic banks sitting on the sidelines — for now. Deem’s Taylor believes that, too, could soon change. The key here is that global majors aren’t going to look at smaller transactions that might be worthwhile for domestic banks to pick up. A JPMorgan “isn’t going to do a USD 50 mn deal; it is simply not big enough to interest them,” Taylor says. But the domestic banks won’t bother if the regulatory burden isn’t made clearer — and less costly to satisfy.

Private now, public later?

So far, Saudi and the UAE are mostly private-placement markets, but for different reasons. In the UAE, the investor base is too shallow for public deals — “we will likely need to see double-digit numbers of private deals first,” Taylor says.

In Egypt, bonds are listed on the EGX but placed privately, and the holders don’t trade — they act as a buy-and-hold base, with the banks attracted to fixed, fully-visible returns. The secondary market is going to pick up, Raouf argues, only “as the investor base expands and issuance volumes grow.”

So, what’s next? Tadawul’s consultation closes 14 June, but it could be months before we see the final framework, let alone a test issuance. In the UAE, the trigger will be new executive regulations that expand the rules to allow private placements.

Perhaps the most interesting signal, though, comes from Taylor, who says that two domestic banks have kicked the tires on existing deals — and one of them has gone so far as to hire a team of specialists. He thinks it likely we’ll see them transact “fairly soon.”

Asset classes to watch in the Gulf: BNPL, earned-wage access, and car finance now that movable-asset security rules are clearer — with SME lending lagging given the challenging data aspect, Taylor says.

And in Egypt? Pundits have been openly questioning for years whether North Africa’s largest market is in the midst of a consumer finance bubble, and you can practically hear the bears salivating at the prospects that one of the more cowboy NBFI lenders goes bust as the FRA and central bank continue their clampdown. That aside, the big maturity tests are future-flow securitization (think: telecom receivables or tuition fees) and whether a real secondary market ever develops out of the buy-and-hold base.