Banks in the GCC cannot meet all the demand for capital. The financing gap across the region has now topped $250 billion. A quiet but fast-growing industry is stepping in to fill it — private credit. Joining me to talk all about it is Arash Jalali, Co-Founder and CEO of Raven. Arash, welcome to the show.
Thank you.
The GCC financing gap — the numbers are big. Why can’t banks fill it?
This is not about filling the gap because banks are not failing in the region. The most important thing is that the region is growing faster than anyone expected. That is why there is a gap — to basically fill the ambition of the region. The $250 billion we are expecting is the growth we are anticipating over the next few years. That is why we need more capital than what banks can construct right now. And that is why everyone in the region is trying to attract more capital to fulfil this ambition.
For people who have never heard of private credit — what is it?
Private credit in simple words is capital that is not being provided by a bank — it is capital that private institutional or private financial creditors are issuing to individuals or corporates.
And that is where Raven comes in?
Exactly. What we do is not just about private credit. Our job is structuring different types of financial needs for corporates, individuals, and high-net-worth individuals — either through corporate credits or private credits.
Moody’s just said Saudi Arabia and the UAE will lead GCC private credit growth. What is driving that?
Saudi Arabia is leading the economy through infrastructure and major projects. The UAE is the hub for the financial market for framing that capital. Private credit in the region is around $6 to $7 billion — compare that to the global private credit market of $1.3 trillion, expected to reach almost $3 trillion. It is a beautiful market that a lot of economies are competing in to push their ambitions forward.
Private credit moves faster and offers more flexibility. What does it actually look like for a business borrowing through Raven?
The most important question every corporate has to ask is not about speed first — it is about whether this borrowing fits their balance sheet. Speed is one factor, but the second factor is whether this capital is going to make the balance sheet healthy, and whether it is something short-term or long-term. You cannot borrow private credit against long-term assets. You have to borrow it against your fast receivables and short-term assets. Otherwise your balance sheet always looks ugly at some point.
Who actually needs what Raven offers?
Different categories — first, corporates. Second, homebuyers. Third, high-net-worth individuals. Fourth, developers. These are the type of partners and clients we mostly work with. We provide them capital by structuring their financial needs and balance sheets so we can craft the right capital for them.
Debt gets a bad reputation — but you argue good debt is actually a strategic tool for growth. How?
Debt in a nutshell is a technology to move value faster — you are borrowing against your future ambition and future projects. But the most important thing is how you look at the debt. Bad debt is debt against just anticipation or promises you do not know are realistic. Good debt is about the resilience of your cashflow. If your cashflow has the resilience and the room to tolerate the downside, it will always be good debt for you.
Thank you so much for being here with us today.
Thank you for having me.
