Barq Receives Preliminary SAMA Approval to Add Financing Activity, Including Shariah-Compliant Products

Saudi digital payments company Barq has received preliminary approval from the Saudi Central Bank (SAMA) to add financing activity to its business scope, marking an expansion of its digital financial services offering in the Kingdom.

Barq announced that the preliminary approval will allow it to move forward with the development of financing solutions, including products designed to comply with Shariah principles. The company said the move forms part of its strategy to expand beyond digital payments and provide a more integrated range of financial services through its digital platform.

Expansion into Financing

According to Barq, the approval represents a new stage in its development from a digital payments and wallet provider towards a broader digital financial services model.

The company said its expanded offering is intended to connect customers’ everyday payment and transfer needs with additional financial services. Barq also highlighted the development of Shariah-compliant financing products as part of the planned expansion.

Barq stated that it is the first digital payments company, or digital wallet, in Saudi Arabia to receive preliminary approval to add financing activity. The company said the move supports its objective of developing an integrated digital financial ecosystem in the Kingdom.

Regulatory Approval Still Required

The preliminary approval does not, by itself, authorise Barq to begin conducting financing activities.

SAMA’s regulatory framework states that preliminary approval is not a licence or authorisation to practise the finance activity. The applicant must complete the applicable regulatory, corporate, capital, operational and other requirements before SAMA can issue the final licence.

Barq also stated that the launch of financing activities and related products remains subject to completing the required regulatory procedures and obtaining the necessary final approvals from SAMA.

Islamic FinTech Implications

The planned development of Shariah-compliant financing products gives the announcement particular relevance to the Islamic FinTech sector.

Saudi Arabia has a substantial digital financial-services ecosystem, and the expansion of an established digital wallet into financing could create another channel through which Shariah-compliant financial products are developed and delivered digitally.

However, the specific financing products, structures and Shariah arrangements that Barq ultimately intends to offer have not been detailed in the announcement. Therefore, the preliminary approval should not be interpreted as confirmation of a particular Islamic financing structure or product.

Industry Impact

Barq’s preliminary approval illustrates the continued convergence of digital payments, financing and Islamic finance within Saudi Arabia’s financial technology ecosystem. If the company proceeds to obtain final regulatory approval and launches Shariah-compliant financing products, the development could add another digital distribution channel for Islamic financing in the Kingdom.

For the Islamic FinTech industry, the announcement is also notable because it shows how digital-wallet platforms are seeking to expand from payments into broader financial services while incorporating Shariah-compliant products into their planned offerings.

Source: Barq official announcement; Saudi Central Bank (SAMA) regulatory framework.