By 2028, the most competitive lenders in the Middle East will operate from unified data, make decisions in real time through intelligent automation, and use composable infrastructure that allows products, regulations, and tech capabilities to evolve without rebuilding core systems, according to a new paper by banking infrastructure provider Stitch and British fintech research, advisory and media company IBS Intelligence.
These industry leaders will rely on artificial intelligence (AI) and robust underlying infrastructure to create a lending platform that is faster, more adaptable, and easier to scale.
These predictions stem from a survey of more than 100 consumers across six Middle Eastern markets on their borrowing experience and interviews with senior lending executives at banks across the region. The study found delayed modernization of loan processes and inefficiencies, alongside gaps between customer expectations and lender capabilities.
In particular, half of the borrowers polled in the region expect funds instantly or same day, and yet, only 19% currently receive this. This reveals a clear divide between borrower expectations and lender performance.
Customer priorities align with these findings. 51% of respondents cited faster approval and disbursement as an area for improvement, followed by more flexible repayment options at 40%, and greater transparency on fees and terms at 37%. A fully digital process is named by 28%, and proactive pre-approved offers by 19%.
The study also noted that, although borrowers seek a digital experience, most lenders have not fully adopted complete digital processes. Among borrowers, 47% reported that their latest loan application was entirely digital, requiring no branch visit or paperwork. A quarter completed their application digitally but still had to submit documents in a branch. Another 12% described a digital process interrupted by technical glitches, and 16% said the process was mostly manual with limited digital support.
Digital challengers gain ground
Disconnected systems, fragmentation, and manual workflows have created frustration among Middle Eastern borrowers. About a third of those surveyed said they abandoned a loan application before completing it.
Complexity was cited as the leading cause, named by 16% of respondents, ahead of slowness at 7%, technical faults at 5%, finding a faster option elsewhere at 4%, and an unavoidable branch visit, at 2%.
The report also highlights the expansion of digital-native providers and challengers. One in five respondents said they have already taken credit from a fintech or buy now, pay later (BNPL) provider instead. Almost all of these respondents cited the bank being too slow or the process being too complex as the top reasons for turning to digital challengers.
A further 23% considered an alternative lender and stayed. Only 56% said their bank simply met the need.
Recent research further highlights the uptake of fintech and BNPL options. According to research by Redseer, a management and strategy consulting firm, one in ten consumers in the United Arab Emirates (UAE) and Saudi Arabia was using BNPL services in 2022. By 2023, that figure had doubled, with one in five consumers using BNPL arrangements for their purchases.
A fast-growing credit market
The Middle East is one of the fastest-growing credit markets in the world. In the UAE, for example, loan portfolios expanded by 17.8% in 2025, primarily driven by increased lending, particularly across the retail and private corporate segments, according to data from the Central Bank of UAE. Meanwhile, net loans at Saudi Arabia’s ten listed banks increased 7% year-over-year (YoY) by the end of Q2 2026, reports Arab News.
Market Research Future expects the personal loans market in the Gulf Cooperation Council (GCC) to grow at a compound annual growth rate (CAGR) of 7.6% between 2025 and 2035, reflecting the scale of unmet consumer lending demand across the region.
PwC anticipates private credit, which are provided to companies by non-bank lenders, to grow 15% to 30% CAGR over the next five to six years in the GCC and Egypt, driven by demand from the industrial sector, particularly from small and medium-sized enterprises (SMEs), and a conducive regulatory and macroeconomic environment.
The Stitch and IBS Intelligence report identifies several structural forces shaping lending demand and creating growth opportunities. First, over 60% of the GCC population is under the age of 30, digitally native, and resistant to outdated lending processes.
Second, the region is home to a significant pool of underserved SMEs. According to Channel Capital, a London-based alternative asset and credit manager, SMEs are the backbone of the GCC economy, contributing about 50% of GDP and accounting for 90% of all businesses. Yet, these organizations receive less than 10% of bank lending, leaving a US$250 billion financing gap.
Third, the Middle East holds 53% of global Islamic finance assets, creating demand for lending platforms that support Sharia-compliant products natively.
Finally, regulators and central banks in the region are promoting banking modernization, actively encouraging industry players to innovate and embrace new technologies.
Interested readers may can download the full Middle East lending report here:
Featured image: Edited by Fintech News UAE, based on image by Stitch.
