subsidiaries

Emkan Finance, alrajhi bank’s microcredit arm, benefitted from favourable market conditions in 2025, driven by Vision 2030 goals for SME development and financial inclusion. The reporting period recorded significant and rapid growth across the Kingdom’s microfinance market, as a result of an increasing credit demand from micro-enterprises and entrepreneurs, fuelled by strong government support and the entry of specialised Fintech lenders contesting for growing market share.

During the reporting year, Emkan continued to build upon its strong momentum from 2024 to expand its portfolio across both Retail and SME segments, while enhancing its digital capabilities and operational resilience. The subsidiary enhanced onboarding flows and reduced approval times through automated decision engines, ensuring near-instantaneous decision-making and disbursement to meet customer demand for speed, flexibility and convenience.

In 2025, Emkan diversified its product portfolio with specialised offerings to effectively capture high growth, underserved micro-segments. This included the launch of POS Financing and BNPL products, alongside the introduction of new SME products, such as the SME Credit Card. Furthermore, the reporting period saw Emkan strengthening internal controls and risk modelling to ensure full compliance with evolving SAMA and regulatory guidelines, while ensuring sustainable growth across all verticals of the business.

As a result, the subsidiary’s recorded a 23% YoY in its customer base, while maintaining a non-performing loan (NPL) ratio below 5%, reflecting disciplined growth and strong portfolio quality. Supported by this increased penetration across both B2C and B2B markets, Emkan reaffirmed its leadership in Saudi Arabia’s fast-growing microfinance sector with a dominant market share in Personal Finance.

SAIBOR remained elevated during the early months of 2025, contributing to a temporary uptick in Emkan’s cost of funds as a result of continued interest-rate pressures. Demonstrating strong adaptability, the subsidiary optimised its liquidity, executed disciplined funding strategies and key capital market programmes, successfully reducing its cost of funds. Emkan also successfully executed a Private Sukuk issuance exceeding X 2 Bn., further strengthening its funding mix and enabling sustained portfolio growth throughout the year.

Emkan’s leadership in digital microfinance and SME funding was recognised through several prestigious awards in 2025, including Best SME Financing Solutions – Saudi Arabia 2025 and Best Digital Finance Company – Saudi Arabia 2025 by International Business Magazine Awards, reinforcing its strong reputation for innovative and responsible lending.

Product innovation and portfolio expansion

Emkan accelerated innovation across its product offerings in 2025 to meet shifting market needs. A major milestone was the launch of Retail-BNPL, designed to capitalise on the rapid expansion of e-commerce and consumer demand for flexible, interest-free instalment options that align with Islamic financing principles. Consumers could choose instalment options from 2-12 months, while an automated settlement process for merchants improved turnaround time and reconciliation accuracy from the backend. To support the product’s rapid market adoption, Emkan deployed a BNPL engine capable of handling high transaction volumes in 2025 to capture the surge in market demand.

In 2025, Emkan introduced an SME Credit Card, with an end-to-end fully digital customer journey. This solution enables SMEs to access and manage working capital more efficiently, reinforcing the subsidiary’s leadership in serving underbanked business segments. These new products strengthened Emkan’s value proposition across both retail and SME markets, supporting strong portfolio expansion and enhanced customer engagement.

Digital infrastructure and technology advancements

Emkan made major strides in 2025 to further enhance its technology backbone and improve operational efficiency, successfully completing its core system migration, and equipping Emkan with highly scalable, secure, and agile infrastructure. A comprehensive digital SME platform revamp was also carried out in 2025, improving processing speed and customer experience.

Data analytics continued to play a central role in Emkan’s decision-making processes. The subsidiary advanced its use of machine learning and AI in 2025 for data gathering, cleansing, and predictive modelling, supported by a unified data analytics platform for real-time reporting and automation. These technologies enabled Emkan to anticipate market trends, refine risk assessment models, and introduce products better aligned with customer needs.

Emkan’s mobile app underwent significant upgrades throughout the year, offering customers a seamless, full-service digital experience, including an end-to-end digital journey from applying for finance products, tracking their requests, and signing contracts directly through the app. With over 120,000 reviews and an Apple App Store rating of 4.5, the app continues to perform above industry benchmarks. Rising customer satisfaction was reflected through Emkan’s Net Promoter Score (NPS).

Attracting and retaining talent

Emkan continued to invest in its workforce with various HR initiatives implemented throughout the year. Key among them was the full implementation of a new HR system, transforming Emkan’s HR operation into a data-driven, employee centric function with real-time insights and self-service tools, enriching the employee experience.

Continued expansion of the Emkan Digital Academy provided employees with access to over 50,000 training programmes, enhancing employee adaptability and opening pathways for career development. The subsidiary also partnered with The Financial Academy to offer specialised programmes in areas such as AML,

fraud prevention, financial compliance, fintech innovation, data analytics, and emotional intelligence, nurturing a compliance culture while developing technical and behavioural capabilities of employees. Emkan also represented the Kingdom at international fintech events, including its role as Strategic Sponsor of Money 20/20 Middle East, further enhancing the organisation’s visibility and attractiveness to global talent.

Additional employee engagement initiatives including shuttle services, recognition programmes (U Deserve It, U Learn It), and community-building activities contributed to a stronger organisational culture.

Strengthening risk management

Risk management capabilities saw further improvement in 2025. Emkan integrated automation into its risk assessment framework and developed a decision engine to evaluate customer creditworthiness more accurately and consistently. The subsidiary also invested in extensive staff training to reinforce advanced risk management skills, ensuring robust governance as the portfolio continues to scale.