- The UAE-based Arab Fund for Economic and Social Development, through its Badir Fund for SMEs, has invested in Shorooq’s Nahda Fund II—a Qualified Investor Fund regulated by FSRA ADGM.
- The move aims to expand access to structured credit for startups and small businesses, especially tech-focused ones, across the region.
- Established in 2017, Shorooq is known for alternative financing models in MENA. Its Nahda Funds provide flexible, non-dilutive financing to growth-stage companies like fintech Abhi and self-storage platform The Box, which recently secured $15 million and $12.5 million, respectively, in debt financing to scale operations.
- This strategic partnership addresses the persistent financing challenges Arab SMEs face due to restrictive bank lending.
Press release:
In a strategic move to bridge the financing gap for small and medium enterprises (SMEs) across the Arab world, the Arab Fund for Economic and Social Development , through its SME financing arm, Badir Fund, is investing in Shorooq’s Nahda Fund II, a Qualified Investor Fund registered with the FSRA ADGM. This investment aims to enhance access to credit for technology companies, fostering economic growth and innovation in the region.
Badir Fund for Developing SMEs is a special account managed by the Arab Fund. It helps small businesses access the financing and technical assistance they need to grow and profit, creating jobs and driving private sector-led growth.
Shorooq, regulated by the FSRA ADGM as a Fund Manager, is a leading alternative investment manager in the MENA region and has pioneered debt financing solutions for startups through its Nahda Funds. The second iteration, Nahda Fund II, continues this mission by offering flexible financing options to growing businesses, signifying a revitalisation of entrepreneurial ventures in the region.
The collaboration between the Badir Fund and Shorooq’s Nahda Fund II comes at a time when SMEs face challenges in accessing traditional bank financing. Banks often have restrictive lending criteria, leaving many SMEs underserved. This partnership aims to fill that gap by providing tailored credit solutions that meet the unique needs of SMEs.
Nathan Kwon, Partner and Credit Head at Shorooq, commented on the partnership: “This collaboration with the Badir Fund is a significant step towards empowering SMEs in the Arab region. By combining our expertise in structured financing with the Badir Fund’s commitment to economic development, we can provide SMEs with the necessary resources to thrive.”
Dr. Essam AlQuorashy, Secretary General for Badir Fund “This investment from the Arab Fund will unlock vital growth opportunities for small businesses, promote their growth and foster financial inclusion of underserved segments across the Arab region.”
Shorooq’s portfolio companies, such as Abhi and The Box, exemplify the potential of structured financing. Abhi, a fintech company, secured $15 million in debt financing led by Shorooq to expand its earned wage access services, promoting financial inclusion for employees and SMEs. The Box, a self-storage firm, secured $12.5 million in financing to enhance its operations.
The investment by the Badir Fund in Shorooq’s Nahda Fund II underscores a shared commitment to fostering SME growth and economic development in the Arab region. By providing SMEs with access to credit, this partnership aims to unlock new opportunities and drive sustainable economic progress.