Finance & Economics

How Alternative Lenders Facilitate Credit Access in UAE

Traditional banks and financial institutions in the UAE typically have rigid lending criteria and abundant bureaucracy, which makes access to credit challenging for certain individuals and small businesses.

How Alternative Lenders Facilitate Credit Access in UAE

However, there are plenty of alternative lenders today that expand both the lending opportunities and a number of people who can qualify for credit in the UAE.

A positive economic outlook and strong real estate market is creating an ongoing demand growth for credit in the UAE despite high interest rates. In late 2023, Credit Sentiment Survey conducted by the Central Bank of UAE revealed a rising consumer appetite for credit and solid growth of business loan demand.

At the same time, in terms of willingness to lend, it is largely concentrated in large firms relative to SMEs. When it comes to individual credit, legacy banks are gradually changing their risk tolerance but many consumers, particularly expatriates and newcomers to the UAE, have issues with creditworthiness assessment. There is clearly a need for alternative lending practices that may cater to currently underserved categories of borrowers.

Beside the challenges regarding the lending criteria, many traditional institutions rely on numerous paper-based and manual credit processes. That often makes credit access and settlement cumbersome, slow and unpleasant. The alternative lenders in the UAE address both challenges, digitizing and simplifying credit access in the country.

We compiled the list of both prominent and emerging players in the alternative lending sector of the UAE. They provide loan services to all kinds of borrowers in a seamless and flexible way.

Huspy

Huspy logo

With a five-year expertise in the lending field, Huspy has become one of the leading mortgage providers in the UAE. The startup simplifies home financing with a transparent and easy-to-understand tech-driven experience. With the help of the Huspy platform, mortgage seekers can close the transaction three times faster than with traditional lenders. Besides, a quote for their mortgage comes with a best price guarantee. Huspy takes care of the whole mortgage process starting from finding the right property to pre-approval and up to disbursal. The platform displays not only the purchase but also renting options, greatly simplifying one’s access to the real estate market.


Optasia

Optasia logo

Optasia empowers digital finance opportunities with the vast potential of artificial intelligence (AI). The platform enables mobile network operators (MNOs), mobile wallet operators, and various financial institutions to offer their end customers micro and nano consumer lending options as well as finance solutions for SMEs. With the alternative credit scoring system that refines in real time, institutions are able to provide their services to a wider pool of borrowers. Besides, AI-led credit scoring helps lenders to effectively manage risk. Collaboration with MNOs and mobile wallet operators serves Optasia’s goal to expand financial inclusion opportunities to previously unbanked populations.


Tabby

Tabby logo

One of MENA’s leading payments and shopping apps, Tabby offers its customers a flexible deferred payment solution. It works for both online and offline purchases. Buyers have the option to either pay the whole sum at a later date or use a four monthly installment payment plan to cover their purchase cost. With Tabby Card, users can also earn cashback on their purchases and use it towards the loan repayment. Besides the UAE, Tabby operates in Saudi Arabia, Kuwait, Bahrain, and Qatar.


Beehive

Beehive is MENA’s first regulated online marketplace for P2P lending and one of the most expensive fintech startups in the UAE. The platform enables seamless, fast and low-cost angel investments for UAE-based SMEs. All the startups meeting the platform’s minimum criteria can participate in the crowdfunding environment created by Beehive. Beehive’s online platform directly connects creditworthy businesses looking for funding with investors looking to support their growth. The absence of intermediaries simplifies the lending process for all stakeholders. Besides, investors get to receive monthly returns on their loans.


FlexxPay

FlexxPay Logo

FlexxPay is an excellent example of a payroll evolution in progress. The startup enables employees to access their already earned income and other valuable benefits before the regular payroll day. Among the other app benefits, there’s a recently-added savings feature, real-time earnings monitoring, rewards and incentives program, and more. In 2023, FlexxPay partnered with Abu Dhabi Commercial Bank (ADCB) to provide their clients with various employee benefits and payroll solutions, including a free digital bank account.


Zenda

Zenda logo

Zenda is an app-based BNPL solution focused on the students’ financial needs. Schooling payment plans can be customized to suit the budgets of various households. With Zenda, borrowers may earn rewards for timely fund repayment, while schools get a lending platform with automated reconciliation and analytics tools. Zenda’s app is available on a members-only basis and is only accessible for parents from select partner schools.


LNDDO

LNDDO logo

LNDDO targets small businesses of the UAE with their alternative credit option providing quick and easy access to working capital finance. The company focuses on flexible, short-term loans that may be used for essential equipment, fresh inventory, augmenting services or optimizing cash cycles. The funds up to $100,000 may arrive at the borrower’s account within a week. Launched in 2021, the startup provides its customers security, being officially authorized by the Financial Services Regulatory Authority (FSRA) under Abu Dhabi Global Market (ADGM).


Yallacompare

Yallacompare logo

Founded in 2011, yallacompare.com has helped numerous users to find and compare credit cards, personal loans, mortgages, car loans, insurance, and bank accounts from both local and international financial institutions. Moreover, yallacompare users may get free access to exclusive offers from leading banks and financial institutions not available to the general public.


Spotii (from NymCard)

Spotii (from NymCard) logo

In 2023, UAE fintech NymCard offering pre-paid, multi-currency, and other card issuance services acquired Spotii, a prominent Buy Now Pay Later (BNPL) startup. This deal enabled NymCard to offer its clients a fully customizable BNPL product tailored to their specific needs and local markets. Therefore, now its integrated platform for both B2C and B2B markets includes BNPL proposition along with eKYC, AI-driven OCR, machine learning-powered rules, intelligent risk assessment, configurable Loan Management System, AI-driven collections app, and streamlined decision-making processes.


Datacultr

Datacultr logo

Datacultr addresses the acute pain point of the lending industry – debt collection. This AI-enabled platform facilitates on-time loan repayments, risk mitigation, and debt management. With data-driven risk mitigation and debt collections management tools, Datacultr’s SaaS-enabled platform digitizes and automates repayment communication and debt collection processes. It also decreases credit risk on unbanked/underbanked/sub-prime customers by collateralizing their smartphones.


Postpay

Postpay logo

Postpay offers a no-interest three-month installment plan for those choosing its solution at the checkout of selected brands. Its customers can also avail extra discounts from the partner retailers. Another Postpay’s solution is Pay Now which enables customers to save their preferred payment method for a faster checkout.


Cashew Payments

Cashew Payments Logo

Cashew offers flexible payment plans with manageable 3,6, and 12 monthly installments on both everyday purchases and big-ticket buys. Cashew’s payment hub enables customers to combine and pay their bills online in one place, monitor their spending with valuable insights, discover rewards, and gain access to exclusive membership discounts from select brands.

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